US STOCKS-Wall St little changed on mixed data; tech higher

* U.S. weekly jobless claims rise unexpectedly

* U.S. existing home sales recover slightly in August

* Indexes: Dow, S&P flat, Nasdaq up 0.3 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to open, adds housing data)

By Angela Moon

NEW YORK, Sept 23 (Reuters) - The Dow and the S&P 500 indexes were flat on Thursday on a mixed reading on the economy from weaker jobs and improving home sales.

Weekly claims for jobless insurance jumped unexpectedly, highlighting continued weakness in the labor market. Data later showed existing home sales rose in August, bouncing from severely depressed levels. For details see [ID:nN23130114]

"The market is going to grasp whatever it can for a tidbit of good news," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore.

The Nasdaq rose as pharmaceuticals and technology stocks listed on the index led gains.

The Dow Jones industrial average <.DJI> was down 11.05 points, or 0.10 percent, at 10,728.26. The Standard & Poor's 500 Index <.SPX> was down 1.70 points, or 0.15 percent, at 1,132.58. The Nasdaq Composite Index <.IXIC> was up 7.62 points, or 0.33 percent, at 2,342.17.

Bionovo Inc shares soared 67 percent to $2.04 after the U.S. health regulators accepted the chemistry, manufacturing and controls plan for its lead drug candidate, Menerba, an experimental treatment for hot flashes related to menopause. For details, see [ID:nSGE68M0IA]

Stocks have traded above major technical lines this week, but with persistently low trading volume at levels about 20 percent less compared to last year's average, investors have been doubtful of the sustainability of the recent rally.

"Equities have been behaving as if the economy was moving stronger, which is not happening. I think we are in a trading range, but short term, the markets are going to shed this belief of a stronger recovery," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

"Equities probably will pull back a little bit here. The S&P 500 is well above 1,100, and a few weeks ago it was close to 1,050, and I think there's room for that kind of pullback."

Red Hat Inc rose after it reported a second-quarter profit above Wall Street forecasts as sales of its software rose sharply. The stock climbed 11.7 percent to $41.04.

Bed Bath & Beyond Inc also reported results that beat quarterly profit and sales estimates. It boosted its full-year forecast, sending the stock up 4.1 percent at $43.75.

Video rental chain Blockbuster Inc filed for bankruptcy protection on Thursday after years of struggling to compete with online and mail-order movie services. It said a majority of senior noteholders agreed to support its recapitalization, cutting debt to about $100 million from nearly $1 billion. [ID:nSGE68M0E6]

U.S. stocks slipped on Wednesday, ending the Dow's five-day winning streak after the Federal Reserve spoke cautiously about the economy and hinted at the possibility of further quantitative easing to spur economic activity. (Editing by Padraic Cassidy)