US STOCKS-Wall St dips in choppy trading after two-day losses

* Jobless claims at lowest in almost 15 years

* Alibaba shares tumble after results, Yahoo (NasdaqGS: YHOO - news) follows

* Dow up 0.4 pct, S&P flat, Nasdaq down 0.2 pct (Updates to midday)

By Rodrigo Campos

NEW YORK, Jan 29 (Reuters) - U.S. stocks edged lower in choppy trading on Thursday as earnings, including Alibaba's, and a further drop in U.S. crude futures dragged shares lower, while a strong reading in the job market gave equities some support.

Alibaba Group shares dropped 9.2 percent to $89.37 after the company's revenue missed Wall Street expectations. The decline took shares of Yahoo, which said earlier this week it will spin off its Alibaba stake, down 5.9 percent to $43.72.

"Alibaba is growing more slowly than thought, and it's a stock a lot of people want to own," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

She said "the growth story of China is called into question" by the Alibaba results.

Supporting stocks, data showed weekly applications for unemployment insurance fell to their lowest in almost 15 years, adding to bullish signals on the labor market.

Trading was choppy as market participants continued to digest Wednesday's statement from the Federal Reserve.

The Fed reiterated its confidence in the U.S. economy, but some investors saw the nod to "international" developments as a potential signal rates could rise later than expected.

"The clearer the Fed wants to be the more it spooks the markets," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

"The statement yesterday was confusing for markets. They (the Fed) put sentences in there for everyone."

At 11:55 a.m. EST (1655 GMT) the Dow Jones industrial average rose 63.21 points, or 0.37 percent, to 17,254.58, the S&P 500 gained 0.07 points, or 0 percent, to 2,002.23 and the Nasdaq Composite dropped 7.84 points, or 0.17 percent, to 4,630.15.

Qualcomm (Swiss: QCOM.SW - news) weighed the most on the Nasdaq 100 with a 11.4 percent drop to $62.88 after it trimmed its outlook for 2015, saying it expects its newest mobile chip will not be used in a major customer's flagship smartphone.

Coach Inc (NYSE: COH - news) shares rose 6.4 percent to $38.80 after the handbag maker posted a better-than-expected quarterly profit.

McDonald's added 4.3 percent to $92.62 after it said chief executive officer Don Thompson would leave at the end of February and be succeeded by chief brand officer Steve Easterbrook.

The energy sector of the S&P 500 fell 0.9 percent and was the worst performer as U.S. crude oil fell below $44 a barrel for the first time since April 2009. The sector earlier fell 2 percent.

Declining issues outnumbered advancing ones on the NYSE by 1,636 to 1,305, for a 1.25-to-1 ratio on the downside; on the Nasdaq, 1,353 issues fell and 1,214 advanced for a 1.11-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 9 new 52-week highs and 26 new lows; the Nasdaq Composite was recording 27 new highs and 90 new lows.

(Editing by Bernadette Baum)