* Weekly initial jobless claims unexpectedly fall
* FedEx drops on quarterly profit forecast
* Ford Motor jumps on Barclays upgrade
* Indexes: Dow up 0.2, S&P off 0.04, Nasdaq up 0.08
* For up-to-the-minute market news see [STXNEWS/US] (Updates to close, changes byline)
By Chuck Mikolajczak
NEW YORK, Sept 16 (Reuters) - U.S. stocks were little changed on Thursday as mixed economic data and a cautious forecast from economic bellwether FedEx kept the market locked in its recent tight trading range.
Shares in FedEx Corp
A drop in initial jobless benefit claims to a two-month low in the most recent week was not enough to lift stocks, while a gauge of business activity in the U.S. Mid-Atlantic showed a contraction for a second straight month in September. [ID:nN16247388]
The S&P 500 has settled into a range between support at its 200-day moving average around 1,115 and resistance around 1,130. Attempts to pierce 1,130 have been thwarted several times since June, including this week.
"We are just in the same growth path we were before the double-dip fears -- that is why the market is just kind of stuck, volumes are kind of low, and there is no conviction one way or the other," said John Canally, investment strategist and economist for LPL Financial in Boston.
"Today, jobless claims were good, corporate earnings data not so good, and that's the tug of war you are in today."
The Dow Jones industrial average <.DJI> gained 22.10 points, or 0.21 percent, to 10,594.83. The Standard & Poor's 500 Index <.SPX> dropped 0.40 points, or 0.04 percent, to 1,124.67. The Nasdaq Composite Index <.IXIC> gained 1.93 points, or 0.08 percent, to 2,303.25.
Also on Thursday, The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate increased 0.4 percent, the largest increase in five months, after gaining 0.2 percent in July.
Analysts polled by Reuters had expected producer prices to rise 0.3 percent last month. In the 12 months to August, producer prices increased 3.1 percent, slowing from the prior month's 4.2 percent increase.
The Philadelphia Fed's survey, expected by a Reuters poll of economists to show growth in manufacturing, showed falling activity for the second consecutive month and was a reminder of the pressure still on the recovery.
Weakness in FedEx spilled over to the rest of the sector.
Rival United Parcel Service Inc
Ford Motor Co
A Reuters poll of institutional investors and strategists found U.S. stocks are expected to make strong gains before year-end as worries about a second recession subside. [ID:nN16273656]
Volume was light with about 6.5 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's estimated daily average of 9.65 billion.
Declining stocks outnumbered advancing ones on the NYSE by four to three, while on the Nasdaq, decliners beat advancers by about five to three. (Editing by Padraic Cassidy)