NEW YORK (Reuters) - Investors showed unusual caution yesterday, leaving US stocks little changed before the potential market tumult of next week's US elections and likely announcement of more stimulus from the Federal Reserve.

Next week's high-profile events could signal shifts in both monetary policy and legislative direction, raising fears that trumped yesterday's earnings news and economic reports.

"You have a double whammy next week: Election Day and the Fed announcement," said Doug Roberts, chief investment strategist at Channel Capital Research.com in Shrewsbury, New Jersey.

Weak revenue forecasts from drugmaker Bristol-Myers Squibb Co. and chip manufacturer Texas Instruments Inc. pulled drug and chipmaker stocks lower.

"Earnings are important, but they are not going to be the driving force," Roberts said.

Bristol-Myers fell 1.1 percent to $26.86 and Texas Instruments shed 0.3 percent to 28.88. The NYSE Arca Pharmaceutical index lost 0.6 percent and the PHLX Semiconductor index dipped 0.4 percent.

But losses were curbed by gains in the consumer discretionary sector after the Conference Board's measure of US consumer confidence rose more than expected. The S&P Consumer Discretionary index rose 0.4 percent, led by a 11.9 percent jump in Coach Inc. to $49.78 after the upscale leather goods maker posted higher-than-expected results.

The Dow Jones industrial average gained 5.41 points, or 0.05 percent, to 11,169.46. The Standard & Poor's 500 Index gained 0.02 point to 1,185.64. The Nasdaq Composite Index gained 6.44 points, or 0.26 percent, to 2,497.29.

Volatility also increased for the second straight session with the CBOE Volatility index up 1.9 percent as traders look ahead toward next week's events.

"This is added to the continuation of earnings reporting season," said Scott Fullman, director of derivative investment strategy at WJB Capital Group. "The potential for increased volatility is rising, along with the probability for a short-term downward move."

Yesterday's session also brought about a slight breakdown in the recent inverse correlation between stocks and the dollar, with stocks edging higher as the dollar advanced 0.8 percent against a basket of currencies.

US Steel Corp, AK Steel Holdings Corp and ArcelorMittal, the world's No.1 steelmaker, all sold off after reporting results. Both US Steel and ArcelorMittal forecast a soft patch extending to the end of the year.

US Steel shed 3.4 percent to $40.85, while AK Steel slumped four percent to $12.84. The S&P Materials index slipped 0.2 percent.

DuPont's earnings beat expectations and the chemical company raised its full-year profit view.

Still, shares fell one percent to $47.22 after hitting a two-year high on Monday.

Yesterday's gainers included Ford Motor Co, which rose 1.5 percent to $14.36 and touched a six-month high after quarterly profit topped estimates and it paid down a big portion of debt.

Dow component International Business Machines Corp added 0.6 percent to $140.67 after boosting its stock buyback programme.

Volume was light with about 7.3 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below the year-to-date moving average of 8.75 billion.

Declining stocks outnumbered advancing ones on the NYSE by about five to four, while on the Nasdaq, decliners beat advancers 1,335 to 1,298.