(Corrects stock comment initially sent at 1558 GMT to change number of banks downgraded by S&P to 18 in second bullet and lead paragraph)
* FedEx tops Q4 estimates but gives cautious outlook
* S&P cuts 18 banks on outlook for markets, regulation
* Obama unveils financial regulatory package
* Indexes mixed: Dow +0.05 pct; S&P -1.4 pct; Nasdaq +0.5 pct (Updates to midday)
By Chuck Mikolajczak
NEW YORK, June 17 (Reuters) - U.S. stocks were mixed on Wednesday, weighted by a downgrade of 18 banks by Standard and Poor's and a disappointing earnings outlook from economic bellwether FedEx Corp.
But the Nasdaq rose, lifted by Qualcomm Inc after Goldman Sachs added the stock to its "conviction buy" list while rival Texas Instruments was upgraded by Banc of America Securities-Merill Lynch to "buy" from "underperform."
S&P in its downgrade of banks cited expectations of more difficult operating conditions because of volatile financial markets and tighter regulation.
Financial stocks fell, with the KBW Bank index down 3.4 percent.
Package delivery company FedEx slid 2.5 percent to $50.15 after reporting fourth-quarter earnings that topped Wall Street estimates but cautioned the operating environment for the next two quarters is expected to be extremely difficult.
"FedEx is definitely throwing some water on the notion that the economy was turning," said Todd Clark, managing director of stock trading at Nollenberger Capital Partners in San Francisco.
"The market, having bounced so sharply from the March bottom, is needing to see some signs that maybe companies can grow their earnings other than just cutting costs."
Investors mulled details of U.S. President Barack Obama's financial reform package, which he called the biggest overhaul of the financial regulatory system since the Great Depression.
The Dow Jones industrial average gained 4.61 points, or 0.05 percent, to 8,509.28. The Standard & Poor's 500 Index dropped 1.43 points, or 0.16 percent, to 910.54. The Nasdaq Composite Index added 8.39 points, or 0.47 percent, to 1,804.57.
Qualcomm rose 3.1 percent to $44.80 while Texas Instruments gained 3.3 percent to $21.41. (Additional reporting by Rachel Chang; Editing by Padraic Cassidy)