U.S. stocks dipped on Wednesday as the euro zone's debt problems curbed market enthusiasm that fueled a rally in the previous session.

Financial stocks were the top decliners, led by a fall in European banks. Concerns remain over tight credit markets that are making it expensive for European banks to raise capital and for euro-zone countries to refinance debt.

The S&P financial sector index lost 1.4 percent, the biggest loser among S&P 500 sectors. Bank of America Corp was the top decliner on the Dow, falling 2.6 percent to $5.65.

The latest sign of stress came from Italy's biggest bank UniCredit, which fell nearly 10 percent after it offered to sell 7.5 billion euro ($9.8 billion) shares at a big discount.

It's back to reality today, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. Yesterday was basically picking up stocks that had been beaten down. Today, it's clear to the market that the fundamental issues have not changed.

Investors had kicked off the new year pushing stocks higher, sending the S&P 500 to its highest level since October.

The Dow Jones industrial average was down 13.28 points, or 0.11 percent, at 12,384.10. The Standard & Poor's 500 Index was down 2.70 points, or 0.21 percent, at 1,274.36. The Nasdaq Composite Index was down 5.34 points, or 0.20 percent, at 2,643.38.

Yahoo Inc named PayPal President Scott Thompson as its chief executive, taking over on January 9 from interim CEO Tim Morse, who will resume his role as chief financial officer. Yahoo shares fell 2.5 percent at $15.87.

AT&T Inc agreed to pay TiVo Inc a minimum of $215 million and additional monthly licensing fees to settle a patent infringement dispute. AT&T shares gained 0.3 percent at $30.47, and TiVo jumped 8.6 percent to $9.68.

New orders for U.S. factory goods rose solidly in November, further evidence the economy is on track to recovery. But the data also showed business capital spending is cooling.

U.S. new-vehicle sales showed automakers ended the year with strong sales, but they forecast lower growth in 2012 as a sluggish economic recovery is expected to continue.

General Motors Co U.S. sales in December rose 5 percent, and sales at Ford Motor Co and Chrysler jumped 10 percent and 37 percent, respectively.

GM shares fell 1 percent to $20.86, while Ford added 2.3 percent to $11.39.

(Editing by Padraic Cassidy)