The U.S. Federal Reserve appears set to launch a third round of unconventional monetary stimulus, while signaling that a weak U.S. economy may warrant ultra-low interest rates for at least another three years. The Federal Open Market Committee will announce its decision at about 1630 GMT at the close of a two-day meeting.

The Labor Department releases first-time claims for jobless benefits for the week ended September 8 at 8:30 a.m.EDT. Economists forecast a total of 370,000 new filings, compared with 365,000 in the prior week.

The producer price report for August is due at 1230 GMT. Economists in a Reuters survey forecast a 1.1 percent rise, against a 0.3 percent gain in July.

Britain's BAE Systems (BAES.L) and Airbus-owner EADS (EAD.PA) said they are in advanced talks to create an industry giant that would overtake rival Boeing (BA.N) in sales and contend with defense cutbacks in Europe and the United States.

European shares .FTEU3 fell 0.4 percent on Thursday, moving further away from the 14-month high hit in the previous session, ahead of the Fed meeting.

Dutch Prime Minister Mark Rutte's Liberals won a closely contested election, but he faced the prospect of having to form a government with his arch-rivals from the Labour party on Thursday.

Wall Street ended little changed on Wednesday, erasing early gains, as investors turned cautious before the Federal Reserve's decision on another round of monetary stimulus to boost the economy.

The Dow Jones industrial average .DJI closed up 9.99 points, or 0.07 percent, at 13,333.35. The Standard & Poor's 500 Index .SPX ended up 3.00 points, or 0.21 percent, at 1,436.56. The Nasdaq Composite Index .IXIC gained 9.79 points, or 0.32 percent, at 3,114.31.

(Reporting by Atul Prakash; Editing by Susan Fenton)

• A Permanent Economic Emergency