US STOCKS-S&P 500 may be pinned at 1,400 until options expire

* Markets barely budge on few catalysts, light volume

* NY factory index worse than expected, CPI flat

* Staples falls after earnings

* Deere drops after earnings miss

* Indexes: Dow flat, S&P up 0.2 pct, Nasdaq up 0.5 pct

By Edward Krudy

NEW YORK, Aug 15 (Reuters) - Sideways trading in the S&P 500 around the 1,400 level on Wednesday was likely to continue through options expiry at the end of the week, with heavy open interest in the options market expected to pin the index to that level absent other catalysts.

Despite incremental gains, U.S. equity markets have basically been little changed for more than a week as the S&P 500 hovers close to a four-year high. Light trading volumes and a lack of news from Europe have meant few catalysts for traders.

Both August call and put options on the S&P 500 are clustered around the 1,400 level, meaning market-makers could pin the index at the level to maintain a market neutral position and see most of those options expire worthless on Friday.

"At 1,400 there could be the potential for a pinning action where those options ultimately expire worthless," said Todd Salamone, vice president of research at Schaeffer's Investment Research. "We have been moving sideways for the last couple of weeks around it and now with just a couple of days to go, it increases the likelihood of a pin."

Economic data on Wednesday provided few catalysts for the market. The New York Fed's "Empire State" general business conditions index for August missed expectations and contracted for the first time since October 2011. Meanwhile, Labor Department data showed consumer prices were flat in July for a second straight month and the year-over-year increase was the smallest since November 2010.

Shares of Deere & Co, reflecting slowing economic growth worldwide, lost 6.7 percent to $74.78 after the world's largest agricultural equipment maker reported a lower-than-expected quarterly profit on Wednesday, citing weak sales in China, India and other emerging markets. Rival Caterpillar Inc slipped 0.6 percent to $87.37 as the biggest drag on the Dow.

Staples Inc slumped 16.8 percent to $11.19 as the worst performer on the index after the office supply chain reported lower-than-expected quarterly revenue on weak demand in North America, Europe and Australia, and forecast flat sales for the fiscal year.

The Dow Jones industrial average gained 2.73 points, or 0.02 percent, to 13,174.87. The Standard & Poor's 500 Index rose 2.06 points, or 0.15 percent, to 1,405.99. The Nasdaq Composite Index added 13.47 points, or 0.45 percent, to 3,030.45.

The S&P 500 had begun a rally early in August which sent the benchmark index to early May highs in anticipation central banks in the United States and euro zone will take action to stimulate their respective economies in September.

But the momentum has waned recently, with the benchmark index unable to muster a move of more than 0.22 percent in either direction over the past five sessions. Volume has been among the lightest of the year so far.

"We will probably have several weeks of low volume, range-bound trading," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "I'm wondering why I'm not on vacation because business is slow."

U.S. industrial output expanded 0.6 percent last month, the fastest pace since April and manufacturing notched another solid advance, hinting at underlying resilience in an economy that has struggled to establish momentum.

Data from the National Association of Home Builders showed homebuilder sentiment rose in August to 37, its highest level in more than five years, and above the 35 in July. The PHLX housing sector index fell 0.6 percent after gaining earlier.

Abercrombie & Fitch Co jumped 8.2 percent to $34.98 as the best performing S&P stock after the teen clothing retailer reported quarterly profit slightly above the forecast it issued two weeks ago and boosted its buyback plan. The S&P retail index advanced 0.7 percent.

Target Corp advanced 2.4 percent to $64.88 after the discount retail chain reported a higher-than-expected quarterly profit and raised its full-year forecast.