NEW YORK (Reuters) - U.S. stocks cut sharp early losses to end mostly down slightly on Thursday as some disappointing earnings reports offset strong economic data, while bond yields slid after a surprising drop in euro zone inflation data.

FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration/File Photo

Investors also were cautious ahead of Friday’s U.S. jobs data for April. The U.S. dollar fell in choppy trading.

U.S. economic data provided upbeat news, however. The number of Americans receiving unemployment aid fell to its lowest since 1973, and the U.S. trade deficit narrowed for the first time in seven months. Factory orders for March also rose.

Wall Street stocks finished well off their lows of the session, with the Dow and S&P 500 indexes earlier falling below their 200-day moving averages - a key technical level - for the first time since early April. The Dow ended the day slightly higher.

On the earnings front, AIG shares dropped 5.3 percent after the insurer reported a lower-than-expected quarterly profit, while Cardinal Health tumbled 21.4 percent after the drug distributor cut its annual earnings forecast.

Quarterly U.S. earnings have been strong, but investors said worries are increasing that corporate profits are at a peak, with estimated year-over-year profit growth for S&P 500 companies above 25 percent, according to Thomson Reuters data.

“Good news is now bad news,” said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York. “There’s really nothing to hold equity prices up given that background.”

The Dow Jones Industrial Average rose 5.17 points, or 0.02 percent, to end at 23,930.15, the S&P 500 lost 5.94 points, or 0.23 percent, to 2,629.73 and the Nasdaq Composite dropped 12.75 points, or 0.18 percent, to 7,088.15.

The pan-European FTSEurofirst 300 index lost 0.70 percent and MSCI’s gauge of stocks across the globe shed 0.37 percent.

A U.S. delegation led by Treasury Secretary Steven Mnuchin arrived in Beijing on Thursday for talks on tariffs, as Chinese media said the country would stand up to U.S. bullying.

Lingering worries over the outlook for U.S. rate hikes added to the day’s cautious tone. A two-day Federal Reserve policy meeting ended Wednesday with no change in rates, as expected, while the U.S. central bank said inflation had “moved close” to its target, leaving it on track to raise borrowing costs in June.

The Fed statement was not quite as hawkish as some had expected, though investors said it reaffirmed the outlook for more rate hikes.

The U.S. dollar erased all its 2018 losses in the past two weeks on expectations the Fed will continue to raise rates, even as other big central banks around the world, including the European Central Bank, take longer to reduce stimulus.

The dollar index fell 0.07 percent, with the euro up 0.29 percent to $1.1985.

Friday’s U.S. employment report for April will be evaluated for further indications of the strength of the labor market and inflation pressures.

In Europe, data showed that euro zone inflation fell to 1.2 percent in April. Economists polled by Reuters had expected it to be unchanged from 1.3 percent in March.

That pushed French and German 10-year government bond yields to 2-week lows after the data.

Benchmark U.S. 10-year government debt yields dropped to two-week lows, while those on two-year Treasury notes fell to a more than one-week trough after hitting a 9-1/2-year peak the previous session.

Benchmark 10-year notes were last up 5/32 in price to yield 2.9477 percent, from 2.964 percent late on Wednesday.

Oil prices rose, boosted by OPEC production cuts and the potential for new U.S. sanctions against Iran. Gains were limited by increasing U.S. crude inventories.

Brent crude futures rose 26 cents to settle at $73.62 a barrel, a 0.35 percent gain. U.S. West Texas Intermediate crude rose 50 cents to settle at $68.43, a 0.74 percent increase.

Gold prices gained as the U.S. dollar softened. Spot gold rose 0.6 percent at $1,312.54 per ounce.