* Trump postpones steel tariffs on Canada, EU, Mexico
* Pfizer sinks on biggest sales miss in four quarters
* Apple gains ahead of results, boosts tech sector
* Dow down 0.7 pct, S&P down 0.2 pct, Nasdaq up 0.5 pct (Updates to late afternoon, changes byline, adds NEW YORK to dateline)
By April Joyner
NEW YORK, May 1 (Reuters) - The S&P 500 pared early losses on Tuesday after a Trump administration official said he hoped to further open China's economy to U.S. companies, though manufacturing data stoked concerns of rising costs that could cut corporate profits.
U.S. stocks came off the day's lows after U.S. Trade Representative Robert Lighthizer said he did not desire to change China's economic system but wanted to limit the damage it causes to the United States and encourage more foreign competition.
The Dow Jones Industrial Average fell 179.55 points, or 0.74 percent, to 23,983.6, the S&P 500 lost 5.41 points, or 0.20 percent, to 2,642.64 and the Nasdaq Composite added 32.66 points, or 0.46 percent, to 7,098.93.
Earlier on Tuesday, U.S. Commerce Secretary Wilbur Ross said the Trump administration was prepared to levy tariffs on China if an American delegation heading to Beijing did not reach a settlement on trade imbalances.
The news came after President Donald Trump on Monday extended a temporary exemption from metal tariffs for the European Union, Canada and Mexico to June 1 just hours before the tariffs were due to come into effect.
Data from the Institute for Supply Management indicated a jump in raw material costs for U.S. companies, in part due to the tariffs on steel and aluminum imports imposed by the Trump administration. It also showed that U.S. factory activity slowed for a second straight month in April.
While first-quarter corporate profits are expected to have notched their best growth in seven years, largely due to lower taxes, investors have focused on cost warnings from companies.
"The red flags are everywhere," said Jim Awad, senior managing director of Hartland & Co in New York. "We're finally getting the inflation that to date has been so elusive."
The energy sector fell 1.1 percent on the back of a more than 1 percent drop in crude oil prices as the dollar remained near a four-month high. Still, oil prices remain near their highest levels since 2014.
Shares of Pfizer Inc fell 4.4 percent, the greatest percentage decline on the Dow, after posting its biggest miss on quarterly revenue in a year as demand for its key drugs fell short of estimates.
Technology was the biggest gainer among the S&P's major sectors, up 1.0 percent as Apple Inc shares rose 2.1 percent ahead of its quarterly report after the bell.
Shares of Match Group Inc, the owner of dating app Tinder, and IAC/InterActiveCorp, Match's parent company, dropped after Facebook Inc announced that it would add dating features to its flagship social network. Match shares tumbled 22.9 percent while IAC shares sank 15.9 percent.
Declining issues outnumbered advancing ones on the NYSE by a 1.28-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored decliners.
The S&P 500 posted four new 52-week highs and 29 new lows; the Nasdaq Composite recorded 31 new highs and 70 new lows. (Additional reporting by Sruthi Shankar and Savio D'Souza in Bengaluru; Editing by Shounak Dasgupta and Jonathan Oatis)