NEW YORK (CNN/Money) - U.S. Treasurys finished mixed on Wednesday, sinking briefly on stronger-than-expected U.S. data but still buoyed by weakness in global equity markets.

Price changes were minor and yields held near historic lows, while the curve extended a recent deepening bias.

Debt dipped in early U.S. trade after data showed consumer prices rose more than expected, while a sharp narrowing in the U.S. trade deficit suggested third-quarter economic growth could be even stronger than analysts' already lofty estimates.

Those losses did not stick, however, as U.S. stocks fell on weak earnings forecasts that underscored the likely poor pace of corporate growth. The Dow Jones industrial average and the Nasdaq composite index fell 1.87 percent and 2.08 percent respectively on earnings gloom from J.P. Morgan Chase (JPM: Research, Estimates) and Oracle Corp. (ORCL: Research, Estimates).

"We can't fight the equity market," said David Mozina, director of global foreign exchange and fixed income research at Bank of America. "I think the fixed income market is not buying into the view of a recovery. There seems to be quite a solid bid tone across the market."

In any case, dealers were not inclined to sell Treasurys amid speculation about possible mortgage-related demand.

Earlier this week Fannie Mae, the nation's largest mortgage finance group, reported its duration gap had widened to minus 14 months from minus nine, reflecting the furious pace of refinancing in August.

"The main driver of the bond market right now is this imbalance in mortgage portfolios and the need for duration," said John Ryding, chief market economist for Bear Stearns. "That's the reason that every time prices pull back there's always someone waiting to buy."

Figures released on Wednesday showed the refinancing rush had slowed a little in the week to Sept. 13 with the Mortgage Bankers Association index falling 7.9 percent, though it is still up 185 percent on the year.

Freddie Mac, the nation's second largest mortgage finance group, also defused the speculation, reporting its duration gap stood at zero in August.

The 10-year note felt some pressure, eased 3/32 to 104-14/32, leaving yields at 3.83 percent from 3.82 percent on Tuesday.

Five-year notes were near flat at 101-19/32 taking yields to 2.89 percent from 2.90 percent. Two-year notes gained 1/32 to 100-8/32, giving a yield of 1.98 percent from 2.00 percent.

The 30-year bond gained 3/32 to 110-4/32 for a yield of 4.72 percent against 4.73 percent.

Traders reported talk Treasury might soon announce the reopening of the 30-year bond after sales of the maturity were suspended last year. Most dismissed the talk, finding it hard to believe the government would risk pushing yields higher at a time when refinancing was playing such a crucial role in supporting consumer spending.

In the currency market, the U.S. dollar fell against the euro and the yen as the market struggled to fathom Japan's latest plans to counter deflation and to assess the risk of strikes on Iraq.

Around 4:00 p.m. ET, the dollar bought ¥121.71, down from ¥122.02 Tuesday, and the euro purchased 97.58 U.S. cents, up from 97.41 Tuesday.

The greenback initially raced higher against the yen after the Bank of Japan, moving to allay fears of a financial crisis, said it would buy shares direct from banks as a way of helping them reduce risks from their share holdings.

"The dollar bounced too far one way and is just coming back," said John Calverley, chief economist and strategist at American Express Bank.  

-- from staff and wire reports