By Stephen Culp NEW YORK (Reuters) – The S&P 500 pared early losses to close modestly lower on Thursday after investors digested disappointing quarterly results from two large U.S. banks and hotter-than-expected inflation data. Initially, all three major U.S. stock indexes sold off sharply in the wake of second-quarter earnings from JPMorgan Chase & Co and Morgan Stanley. Both reported slumping profits and warned of impending economic slowdown. Losses narrowed as the session wore on, with advancing microchip stocks helping nudge the Nasdaq Composite Index to a nominal gain. “There was an irrat…