* Apple hits $1 trillion mark, turns U.S. indexes positive
* Oil up, traders cite industry report of crude build at Cushing
* Yields edge lower as fresh trade fears inspire risk-off
* Gold falls to 1-year low as the U.S. dollar marches higher
* Germany's DAX down 1.5 pct
By Laila Kearney
NEW YORK, Aug 2 (Reuters) - A deepening trade dispute between the United States and China weighed on global stocks and bond yields on Thursday, but a rise in Apple shares took its valuation above a record $1 trillion and helped lift major U.S. indexes into positive territory.
In midday trading, Apple Inc AAPL.O became the first publicly traded company with a market capitalization exceeding $1 trillion. That led a rebound in technology stocks that helped key U.S. indexes pare earlier losses to turn positive. certainly a tremendous achievement to create a company with a $1 trillion market cap,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. Still, he said, "it's just a number."
The tech company's stock jumped more than 3.3 percent to as high as $208.38, bringing its gain to about 9 percent since Tuesday when it reported quarterly results that beat expectations and said it bought back $20 billion of its own shares. Wall Street, the Dow Jones Industrial Average .DJI fell 8.12 points, or 0.03 percent, to 25,325.7, the S&P 500 .SPX gained 13.16 points, or 0.47 percent, to 2,826.52 and the Nasdaq Composite .IXIC added 91.32 points, or 1.18 percent, to 7,798.61.
The Nasdaq, Dow and benchmark S&P indexes had opened lower, but began to turn positive as the advance in Apple shares helped take the focus away from the trade dispute.
Still, concerns remained over the U.S.-China trade spat, which intensified on Wednesday after U.S. President Donald Trump raised pressure on China by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.
China on Thursday urged the United States to "calm down," but market participants remained unnerved.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.75 percent, while the pan-European FTSEurofirst 300 index .FTEU3 lost 0.85 percent.
Germany's blue-chip index DAX .GDAXI , which is seen as a trade war proxy, fell 1.5 percent while the broader pan-European STOXX 600 .STOXX was down about 0.8 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.6 percent down, dragged lower by a 1.8 percent fall in Chinese H-shares .MICN00000PUS. .
Benchmark U.S. government bond yields dipped as the market sought safe-haven debt in Treasuries amid the trade dispute. US/
"We're in risk-off mode after the back and forth between China and the U.S. on tariffs," said Priya Misra, head of global rates strategy at TD Securities in New York. "You're already seeing (trade tension) affect investment decisions globally, so it is a growth concern."
Euro zone government bond yields dipped, and borrowing costs in Germany and France pulled back from seven-week highs.
On Wednesday, the Federal Reserve kept interest rates unchanged as expected, characterizing the U.S. economy as strong and staying on track to increase borrowing costs in September and likely again in December.
Gold prices inched downward after Fed's upbeat assessment of the economy to the lowest price in more than a year as the dollar, which typically has an inverse relationship with gold, rose. gold XAU= dropped 0.6 percent to $1,208.60 an ounce. U.S. gold futures GCcv1 fell 0.82 percent to $1,217.50 an ounce.
The dollar index .DXY rose 0.52 percent, with the euro EUR= down 0.57 percent to $1.1592.
Oil prices strengthened after an industry report suggested U.S. crude stockpiles would soon begin to decline again after a surprise rise in the latest week.
Traders said prices rallied when industry information provider Genscape reported crude inventories at Cushing, Oklahoma, delivery hub for U.S. crude, dropped 1.1 million barrels since Friday, July 27. crude futures LCOc1 settled up $1.06, or 1.5 percent at $73.45 a barrel. U.S. crude CLc1 rose $1.30, or 1.9 percent, to $68.96 a barrel.