Stocks were little changed in choppy trade on Thursday after manufacturing data came in stronger than forecast, but gains were capped as investors took a breather from the previous session's powerful rally.

The pace of growth in the U.S. manufacturing sector picked up in November at its strongest level since June, and new orders rose, according to an industry report. For details, see

It was certainly a decent outcome. You're not falling off a cliff, but you're not gaining much momentum either, said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.

It's better than the alternative that most people were talking about, even just a few weeks ago when there was talk of a recession, and things were falling off a cliff.

The Dow Jones industrial average <.DJI> was down 5.71 points, or 0.05 percent, at 12,039.97. The Standard & Poor's 500 Index <.SPX> was up 1.50 points, or 0.12 percent, at 1,248.46. The Nasdaq Composite Index <.IXIC> was up 10.54 points, or 0.40 percent, at 2,630.88.

Wall Street soared more than 4 percent on Wednesday after major central banks jointly agreed to make cheaper dollar loans for struggling European banks to prevent the euro zone debt crisis from worsening.

In company news, Yahoo Inc was up 2.7 percent at $16.14 after Reuters reported Blackstone Group LP and Bain Capital along with Asian partners were preparing a bid for the Internet company.

Lululemon Athletica Inc dropped 10.8 percent to $44.33 after the yoga wear retailer's quarterly sales missed expectations.

Earlier, data showed U.S. weekly jobless claims rose unexpectedly last week, reinforcing the view the battered labor market was healing slowly.

China's factory sector shrank in November in the face of weakening demand both at home and abroad. The data may feed worries the global economy was sputtering.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)