Stocks were little changed on Thursday as a weak outlook from economic bellwether FedEx and sharply lower profit from investment bank Bear Stearns helped stall a rally that followed this week's aggressive interest rate cut.

Rounding out the week of closely watched earnings from Wall Street banks, Bear Stearns Co Inc's profit plunged 61 percent on bad bets on subprime mortgages and disrupted fixed-income trading.

But Goldman Sachs posted third-quarter earnings that beat Wall Street estimates, calming some fears about the impact of the credit crunch.

Package delivery company FedEx Corp lowered its full-year earnings outlook due to the weaker-than-anticipated economic environment, sending its shares down more than 3 percent to $104.25.

I think the focus will now return to corporate earnings reports, said Eric Kuby, chief investment officer at North Star Investment Management Corp. in Chicago.

As we saw this morning from Goldman Sachs and Bear Stearns, some companies are performing well, while others are struggling, he said.

The Dow Jones industrial average was down 11.38 points, or 0.08 percent, at 13,804.18. The Standard & Poor's 500 Index was down 1.56 points, or 0.10 percent, at 1,527.47. The Nasdaq Composite Index was up 1.33 points, or 0.05 percent, at 2,667.81.

In his first remarks since the Federal Reserve lowered the benchmark lending rate by half a percentage point on Tuesday, Chairman Ben Bernanke warned Congress that raising the ceiling on the size of loans mortgage finance enterprises Fannie Mae and Freddie Mac can buy could undermine market discipline. Bernanke's prepared remarks were provided to Reuters by a source.

Bear Stearns shares were up 0.2 percent to $115.83. Many investors had expected a poor earnings report, an analyst said.

U.S. holiday sales are expected to rise at their slowest pace in five years as the weak housing market and a credit crunch temper consumer spending, the National Retail Federation said.

In positive economic news, the number of U.S. workers signing up for jobless benefits fell by 9,000 last week, a government report showed on Thursday, surprising analysts who had expected a rise.

A drop in the dollar to a record low against the euro, now worth more than $1.40, was a worrying side effect of the Fed's decision Tuesday to cut benchmark lending rates by a surprising half a percentage point.

While a weakening dollar can give a lift to shares of big exporters, it also threatens to stoke inflation because of the United States' heavy reliance on imported goods.