US STOCKS-Wall St little changed after 2-day drop, data

* Initial jobless claims climb more than expected

* Factory orders fall for sixth straight month

* AbbVie (Xetra: 4AB.DE - news) to buy Pharmacyclics (NasdaqGS: PCYC - news) for about $21 bln

* Costco climbs after results

* Indexes up: Dow 0.12 pct, S&P 0.01 pct, Nasdaq 0.18 pct (Adds factory orders data)

By Chuck Mikolajczak

NEW YORK, March 5 (Reuters) - U.S. stocks were little changed on Thursday, in the wake of two days of declines on the S&P 500, as economic data did little to alter expectations on the timing of an interest rate hike by the Federal Reserve.

Initial jobless claims rose to 320,000 in the latest week, above the 295,000 estimate and 313,000 in the prior week. The disappointing claims numbers come after a weaker-than-expected private payrolls report on Wednesday and ahead of Friday's monthly employment report.

A separate report showed new orders for U.S. factory goods unexpectedly fell in January for a sixth month, a sign of weakness in the manufacturing sector.

As investors attempt to gauge the timing of the Fed's impending rate increase, the equity market's advance has slowed on the heels of the latest record highs for both the Dow and S&P 500 on March 2, with each index down 0.9 percent.

"There is nothing really to drive sentiment one way or the other that is going to change people's perceptions on anything at the moment so therefore you are just getting this churning back and forth," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

"Once we made that new high the other day, the market just backed off and now it is just churning until tomorrow."

The Dow Jones industrial average rose 21.35 points, or 0.12 percent, to 18,118.25, the S&P 500 gained 0.3 points, or 0.01 percent, to 2,098.83 and the Nasdaq Composite added 8.83 points, or 0.18 percent, to 4,975.97.

AbbVie is to buy Pharmacyclics for about $21 billion, giving it access to what is expected to be one of the world's top-selling cancer drugs and expanding its reach in the profitable oncology field. Pharmacyclics shares jumped 10.5 percent to $254.77 while AbbVie lost 3.1 percent to $58.39.

Costco Wholesale rose 2.2 percent to $150.39 after it reported a better-than-expected quarterly profit. Retailers will be watched as they post monthly sales results for signs of whether lower gas prices have translated to improved spending elsewhere in the economy.

Kroger gained 5 percent to $73.12 after the biggest U.S. supermarket operator reported a 23 percent rise in quarterly profit and forecast full-year earnings above expectations.

The European Central Bank said it will start its new government bond-buying program of 60 billion euros a month on March 9 and raised its economic growth forecast for 2015. It boosted its 2016 inflation forecast to 1.5 percent.

Advancing issues outnumbered declining ones on the NYSE by 1,590 to 1,271, for a 1.25-to-1 ratio; on the Nasdaq, 1,473 issues rose and 1,073 fell for a 1.37-to-1 ratio.

The benchmark S&P 500 index posted 18 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 72 new highs and 25 new lows.

(Editing by Bernadette Baum)