Stocks were little changed on Thursday as concerns over rising yields on Eurozone debt kept optimism over another round of improved U.S. economic data in check.

Spanish bond yields hit 6.98 percent, their highest level since 1997, at a 10-year auction, while a French bond auction also saw high yields.

Losses were capped after data showed U.S. claims for jobless benefits hit a seven-month low last week, while permits for future home construction rebounded strongly, bolstering views the economy was gaining traction.

The very short term is really being driven by fear, fear that is Eurozone centric, so that is really putting a cap on any positive view on the U.S. market, said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

So in spite of the fact that we've gotten data that is consistently better than many were expecting, certainly supportive enough for us to avoid a recession, the fear is the Eurozone represents a future risk to our current outlook for domestic stability.

The seven percent mark for bond yields is viewed by investors as unsustainable, as both Greece and Portugal were forced to seek bailouts after yields hit similar levels.

The Dow Jones industrial average rose 37.20 points, or 0.31 percent, at 11,942.79. The Standard & Poor's 500 Index was up 0.32 points, or 0.03 percent, at 1,237.23. The Nasdaq Composite Index was down 4.83 points, or 0.18 percent, at 2,634.78.

Investors have struggled weighing the threat of a deepening European crisis against U.S. economic data that has been better than expected.

On Thursday, not all U.S. data was positive. A survey showed the pace of factory activity in the U.S. Mid-Atlantic region slowed more than expected in November after a sharp gain the month before.

Among the biggest net losers, Sears Holdings Corp. slumped 5.6 percent to $64.49 after reporting its quarterly loss almost doubled as weak demand at its Sears and Kmart stores hurt sales.

Applied Materials Inc. fell 5.2 percent to $11.83 a day after the chip gear maker gave a cautious revenue outlook and warned it expects to be affected by a tough economy. The PHLX semiconductor index lost 1.8 percent.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)