* Mixed corporate earnings pull S&P 500, Nasdaq away from highs
* ECB's Draghi sounds upbeat economic tone, leaves rates unchanged
* Crude gains amid U.S. stockpile drop, Middle East tensions (Updates to afternoon U.S. market trading, changes dateline, byline)
By Stephen Culp
NEW YORK, July 25 (Reuters) - U.S. stocks backed off record highs and bond yields rose following mixed earnings and rosier-than-expected economic sentiment from the European Central Bank's governor.
The ECB signaled its intention to explore monetary easing but did not cut interest rates, and bank President Mario Draghi sounded more upbeat on the economy than investors expected, sending equities lower and boosting government debt yields. ECB's rosier outlook may be giving the market a bit of a chill," said Chuck Carlson, chief executive of Horizon Investment Services in Hammond, Indiana. "The market continues to hope for dovish central banks and the actions of one central bank lead the market to wonder what that means for the Federal Reserve."
A mixed bag of earnings reports from a wide range of U.S. companies pulled Wall Street lower a day after the S&P 500 and the Nasdaq hit all-time highs, painting a picture of profit beats amid underwhelming guidance.
"Earnings have been decent, but the guidance isn't what the market is looking for," Carlson added.
Downbeat guidance points to an economic slowdown in the midst of the protracted U.S.-China trade war, which should encourage the U.S. Federal Reserve to cut interest rates next Wednesday for the first time in a decade.
"The Fed has kind of backed itself into a corner to cut rates in July," said Carlson. "But there are people at the Fed who are asking 'why are we cutting rates again?' You've got a market at all-time highs. That tug of war is going to go on."
The Dow Jones Industrial Average .DJI fell 169.35 points, or 0.62%, to 27,100.62, the S&P 500 .SPX lost 17.65 points, or 0.58%, to 3,001.91 and the Nasdaq Composite .IXIC dropped 79.87 points, or 0.96%, to 8,241.63.
European stocks reversed their initial gains in reaction to the ECB's easing intentions after Draghi said the risk of a recession in the euro zone was "pretty low" and the central bank would wait for more data before "taking action." pan-European STOXX 600 index .STOXX declined 0.56% and MSCI's gauge of stocks across the globe .MIWD00000PUS fell 0.55%.
U.S. Treasury yields rose after Draghi said the ECB sees a low risk of a recession in the euro zone, even as he acknowledged a worsening outlook. 10-year notes US10YT=RR were last down 8/32 in price to yield 2.0775%, compared with 2.05% late on Wednesday.
The 30-year bond US30YT=RR last fell 21/32 in price to yield 2.6083%, compared with 2.578% late on Wednesday.
The dollar index, which measures the greenback against a basket of other world currencies, inched higher, while the euro gave up earlier gains to show a nominal decline.
The dollar index .DXY rose 0.11%, with the euro EUR= down 0.02% at $1.1137.
The Japanese yen weakened 0.45% versus the greenback at 108.70 per dollar, while sterling GBP= was last trading at $1.2452, down 0.23% on the day.
Oil prices rose as Middle East tensions and a substantial drop in U.S. crude stocks raised supply concerns. crude CLcv1 rose 1% to $56.44 per barrel and Brent LCOcv1 was last at $63.75, up 0.9% on the day.
Spot gold XAU= dropped 0.8% to $1,414.60 an ounce.
Copper CMCU3 fell 0.28% to $5,982.00 a tonne.
Three-month aluminum on the London Metal Exchange CMAL3 eased 0.03% to $1,825.50 a tonne.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets
https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations
https://tmsnrt.rs/2Dr2BQA Markets see more Turkish rate hikes ahead png
https://tmsnrt.rs/2X3G05d Life below zero
https://tmsnrt.rs/2y8cw83 BREAKINGVIEWS-Markets want to see colour of Mario Draghi's money