--Stocks chop around even after paring morning drop

--Europe provides direction in absence of major news and data

--Energy, industrials lead drop; Travelers lowest among blue-chips

By Christian Berthelsen

Of Dow Jones NEWSWIRES

NEW YORK (Dow Jones)-U.S. stocks pared morning losses Friday but remained in the red, in a choppy market that lacked strong direction from economic data or major news developments.

For the most part, indexes took their cue from European markets, which see-sawed on the back of weak economic data. In one of the market's biggest developments of the day, shares of online business-review site Yelp began trading in their stock market debut, rising 60% off their $15 offering price to $24 a share.

The Dow Jones Industrial Average was down 4.4 points to 12975. The Standard & Poor's 500-stock index lost 0.9 points to 1373, and the Nasdaq Composite was up 3.3 points to to 2992.

Half of the S&P's 10 sectors were lower, led down by energy and industrials. Blue chips were weighed down by Travelers, which declined 1.2%, but supported by Hewlett-Packard, which rose 1%.

"The market is shifting into neutral, having a hard time picking up a clear direction," said Barry James, president and CEO of James Investment Research. "We're not saying run for the exits, but we're in a topping phase so it's hard to know exactly what it's going on."

The Stoxx Europe 600 was up 0.1%, down from being 0.3% higher at its intraday high, after the release of weak economic data. Retail sales in Germany fell 1.6% in January while analysts were expecting a slight increase, and data showed that joblessness in Spain continued to increase in February. Spain already had the highest unemployment rate in the euro zone at 23.3%.

European Union leaders signed a new fiscal pact, adopting strict new austerity measures, which also concerned investors at a time when economic conditions were still deteriorating. Still, Goldman Sachs raised its three-month and six-month targets on the major European indexes, and upgraded its rating on the European banking sector to "overweight" from "neutral."

There was little to provide other direction to the market, as no major economic data were scheduled for release.

Asian bourses were broadly higher on the back of U.S. gains in the previous session, with China's Shanghai Composite climbing 1.4% to a 3 1/2-month high and Japan's Nikkei Stock Average up 0.7% to close at seven-month high.

Crude-oil futures eased 1.2% to $107.56 a barrel, while gold futures gave up 0.5% to $1,713.70 an ounce. The U.S. dollar gained against the euro and the yen. The yield on the 10-year U.S. Treasury fell to 1.992%.

In corporate news, shares of Sara Lee rallied 4.8% after the company said it can now go ahead with its plan to spin off its coffee and tea business on the Amsterdam stock exchange. The company said it would pay a special dividend of $3 a share to its shareholders immediately after the spinoff, which is expected to be completed by the end of June.

Shutterfly jumped 20% after the company agreed to buy certain assets of Eastman Kodak 's online photo services business for $23.8 million.

DCP Midstream Partners lost 4.2% after the natural gas limited partnership said it launched a public offering of 4.75 million common units.

-By Christian Berthelsen, Dow Jones Newswires; 212-416-2381; christian.berthelsen@dowjones.com.