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Day after big rally, stocks end trading mixed

Msnbc.com news services

The stock market rested Thursday after staging its biggest rally in two-and-a-half years the previous session. Major indexes ended trading mixed.

According to preliminary calculations, the Dow Jones industrial average fell 25.65 points, or 0.21 percent, to 12,020.03 The S&P 500 ended 2.38 lower, or 0.19 percent, to 1,244.58. The Nasdaq finished up 5.86, or 0.22 percent, to 2,626.20.

After the Wednesday jump stocks were up more than 7 percent for the week. The Dow rocketed 490 points that day, its seventh-best gain ever, after central banks around the world slashed the cost of borrowing dollars for European banks. The coordinated action was aimed at shoring up European banks and averting a deeper credit crisis.

Another rise in weekly jobless benefits seemed to weigh on investors. The Labor Department said initial applications rose to 402,000 last week, the second weekly increase in a row. November's labor report comes out Friday. Economists forecast the unemployment rate will remain at 9 percent.

A stronger manufacturing report didn’t help the market much. The Institute for Supply Management said that manufacturing grew last month at the fastest pace since June.

Investors often turn cautious following giant leaps, said Sam Stovall, chief equity strategist at S&P Capital IQ. The Dow shot up 813 points in the first three days of the week as fears ebbed that Europe's debt crisis would turn into a global panic. The market also pushed higher after a record number of shoppers went to stores over the Thanksgiving weekend.

"It's almost like rooting for a football team that won by a very big score," Stovall said. The next day, people are likely wondering whether the big victory was a one-off event or the start of a lasting trend.

The Associated Press contributed to this report.