U.S. stocks slipped as concerns over a weakening economy in Europe prompted investors to consolidate some of the market's recent gains.

The Dow Jones Industrial Average declined 32 points, or 0.3%, to 12431, and the Standard & Poor's 500-stock index eased one point, or 0.1%, to 1291 in midday trade.

From Morrison Securities Pty. Ltd.:

The Nasdaq Composite edged up five points, or 0.2%, to 2708. Leading the Dow's decliners were energy and consumer-staple stocks. Coca-Cola dropped 2.1%, Chevron lost 0.9% and Exxon Mobil fell 1.1%.

Telecommunications and materials limited some of the losses. Verizon Communications rose 1.1% and AT&T added 0.5 percent. Investors are reassessing the recent run-up in stocks, which has seen the Dow rise nearly 700 points, or 6%, in the last 14 trading days.

The pullback came after new signs that Europe's economy is slowing, adding to fears about how the ongoing debt crisis there will play out. Data released Wednesday showed Germany's economy probably contracted around 0.25 percent in the fourth quarter, while Spain's industrial output dropped 7 percent in November from a year ago after declining 4.2 percent in October, suggesting Spain's economy may have also contracted in the fourth quarter.

EUROPEAN STOCK MARKETS

European stock markets fell Wednesday on fears about the weakening euro-zone economy. The benchmark Stoxx Europe 600 index lost 0.4% to finish at 249.93. Nationally, the U.K.'s FTSE 100 index fell 0.5% to 5670.82, France's CAC-40 index shed 0.2% to 3204.83 and Germany's DAX slipped 0.2% to 6152.34.

Wednesday's declines came after David Riley, head of sovereign ratings for Fitch Ratings, said the European Central Bank should do more to prevent the collapse of the euro. Fresh signs that Europe's economy is slowing added to fears about how the debt crisis in Europe will play out.

Economic data showed Germany's economy contracted around 0.25% in the fourth quarter of 2011, while Spain's industrial output dropped 7% in November from a year earlier after declining 4.2% in October, suggesting Spain's economy may have also contracted in the fourth quarter.

Adding to these concerns, the ECB said its overnight-deposit facility reached another record, suggesting euro-zone banks prefer to park cash safely at the ECB than lend to other banks. Speculation that France had been warned of an imminent credit-rating downgrade by Standard & Poor's Investors Service added pressure, although a top French official said the French government hasn't received any notification of a downgrade from any ratings company.

US Stocks Mixed; -2- Worries about the euro-zone economy overshadowed some of the better news out Wednesday,including an auction of five-year German government debt that attracted very strong demand, with the average yield for that maturity below 1% for the first time on record.

A decline in oil prices and a strengthening in the dollar against the euro led to a drop in shares of heavily weighted energy stocks in Europe. In London, Royal Dutch Shell fell 3.1%, while BP dropped 0.9%. On the upside, shares of Alcatel-Lucent jumped 6.9% in Paris after a Deutsche Bank upgrade to buy from hold. Banks rallied a second day in Italy, with UniCredit up 5.5% after analysts at Bernstein Research lifted its investment rating on the shares to outperform from underperform,citing a "compelling" valuation. Markets were jittery ahead of debt auctions in Italy and Spain Thursday, which will bea key event.

ASIA-PACIFIC MARKETS

Most Asian markets ended higher Wednesday, with resource- and financial-sector stocks underpinning the gains after a strong performance for global equities and commodities a day earlier. Chinese stocks declined for the first time in four trading days, as coal miners returned some of this week's advances on profit-taking.

Japan's Nikkei Stock Average added 0.3%, Hong Kong's Hang Seng Index gained 0.8% and Taiwan's Taiex inched up 0.1%. China's Shanghai Composite fell 0.4%, paring this week's gains to 5.2%, while South Korea's Kospi fell 0.4%.

Aluminum Corp. of China added 2.3% in Hong Kong and 0.2% in a downbeat Shanghai market. Several steel makers climbed in the region, with Posco adding 0.7% in Seoul and JFE Holdings gaining 0.6% in Tokyo. Angang Steel added 4.4% in Hong Kong and 0.9% in Shenzhen.

The gains came after UOB KayHian upgraded the Chinese steel sector to overweight from underweight, while raising the recommendation on Angang to buy from sell on attractive valuations. The region's energy stocks mostly advanced as Nymex crude-oil futures stayed above the $101 a barrel level. Inpex Corp. rose 1.4% in Tokyo and Cnooc added 1.3% in Hong Kong. In Shanghai, China Coal Energy dropped 0.4%, China Shenhua Energy declined 1% and Yanzhou Coal Mining lost 1.4% as investors locked in recent gains.

COMMODITIES

Base metals closed mostly flat on the London Metal Exchange Wednesday, having drifted in relatively narrow ranges throughout the session. At the close, LME three-month copper was 0.5% higher at $7,739 metric ton, while aluminum was up just $2, or 0.1%, at $2,165/ton.

The metals had started the session on a strong footing, with copper hitting a one-month high at $7,831/ton, before macro-driven profit-taking sent prices lower.

Stalling base metals' progress Wednesday was a generally downbeat tone in the stock markets and the European currency, which lost ground amid fresh concerns over the state of the euro-zone economy. A selloff in crude-oil futures gained steam mid-morning Wednesday after U.S. weekly oil data showed a sharp drop in demand and a larger-than-expected rise in oil stockpiles. Demand for gasoline fell to a near nine-year low last week, the Energy Information Administration said. Demand of 8.179 million barrels a day was down 4.4% from a week earlier and 7.3% below a year earlier.

The drop put demand at the lowest level since Feb.7, 2003. The severe weakness in gasoline, along with an 8.1% drop in distillate use (diesel/heating oil) to a one-month low, cut total oil demand to a 32-month low of 17.811 million barrels a day. Light, sweet crude oil for February delivery on the New York Mercantile Exchange settled 1.3% lower at $100.87 a barrel. Gold futures advanced to a four-week high as investors bet the market's recent upswing would hold as Europe's debt woes fuel demand for alternative assets. The most actively traded gold contract, for February delivery, rose $8.10, or 0.5%, to settle at $1,639.60 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest ending price since Dec. 13.