Stocks were mixed on Wednesday, weighted by a downgrade of 22 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-Merrill 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 <.BKX> 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 <.DJI> gained 4.61 points, or 0.05 percent, to 8,509.28. The Standard & Poor's 500 Index <.SPX> dropped 1.43 points, or 0.16 percent, to 910.54. The Nasdaq Composite Index <.IXIC> 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)