Stocks dipped in choppy trade on Thursday as investors grappled with uncertainty in the euro zone, a raft of corporate earnings and economic data that painted a mixed picture of the domestic recovery.

Sparking an early selloff, Citi analysts said it is likely Moody's will place France's Aaa rating on review for possible downgrade by the autumn. That washed away a positive tone after a successful Spanish debt auction.

Better-than-expected earnings from Bank of America Corp , Morgan Stanley , and eBay Inc helped put a floor under the market, but attempts to push the market higher appeared to be met with more selling.

The market sailboat is just kind of fluttering in the wind right at the moment, said Fred Dickson, chief market strategist at D.A. Davidson & Co Lake Oswego, Oregon.

Raising concerns about the economic outlook, new weekly claims for unemployment benefits were above expectations, and the prior week's number was revised upward, Labor Department data showed.

The Dow Jones industrial average <.DJI> dropped 29.45 points, or 0.23 percent, at 13,003.30. The Standard & Poor's 500 Index <.SPX> was down 3.48 points, or 0.25 percent, at 1,381.66. The Nasdaq Composite Index <.IXIC> took off 1.70 points, or 0.06 percent, at 3,029.75.

Continuing what appeared to be a solid start to the earnings season and boosting the Nasdaq, eBay Inc rose 14.2 percent to $40.93 after hitting a 6-year high earlier in the session. The online auctioneer's sales and profit grew more than expected and it raised its 2012 forecasts.

Of the 77 S&P 500 companies reporting through Thursday's opening bell, 81 percent beat estimates.

Bank of America Corp , the No. 2 U.S. bank, dipped 0.4 percent to $8.88 after spending the morning higher and Morgan Stanley rose nearly 1 percent to $17.81 after they both reported better-than-expected results. The S&P financial sector <.GSPF> slipped 0.4 percent.

Spain, the latest trouble spot in the euro zone debt crisis, sold 2.5 billion euros ($3.3 billion) of bonds in a successful auction, but yields rose.

The ECB's efforts to pump liquidity into the system has taken fears of a banking crisis off the table, but all the problems are still there for all these countries, said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

For U.S. investors, it's just going to be simmering on the back burner, maybe it comes to the front burner, and back and forth. It's still going to be a major issue and is not going to go away anytime soon.

Travelers Cos Inc was the top boost to the Dow, up 4.3 percent to $62.03 after the property insurer easily topped estimates and raised its dividend.

Verizon Communications Inc gained 2.4 percent to $38.56 after earnings and revenues just beat estimates, even as wireless growth slowed.

According to Thomson Reuters data, 35 companies in the S&P 500 are due to report Thursday. Notables after the close include Microsoft Corp , Chipotle Mexican Grill Inc and SanDisk Corp .

A slew of economic data sent mixed signals to investors. The pace of factory activity in the mid-Atlantic region waned in April for the first time in five months, while a gauge of future U.S. economic activity rose in March to its highest level in nearly four years.

Meanwhile, home resales fell in March but the supply of properties on the market tightened as prices inched higher.

Biotechnology companies helped lift the Nasdaq, led by Human Genome Sciences Inc , up 98 percent to $14.19, and Gilead Sciences Inc , rising 12 percent to $52.13.

Human Genome rejected an unsolicited $2.6 billion bid from long-time partner GlaxoSmithKline Plc .

Gilead's combination of experimental hepatitis C drugs, developed with Bristol-Myers Squibb Co , showed impressive results in a clinical trial.

U.S.-listed shares of Glaxo gained 0.9 percent to $46.79 and Bristol-Myers rose 1.6 percent to $34.11. The Nasdaq biotech index <.NBI> climbed 1.9 percent.

(Reporting By Edward Krudy; editing by Jeffrey Benkoe)