* Apple hits $1 trillion mark, turns Nasdaq positive
* Oil up; traders cite industry report of crude build at Cushing
* Yields edge lower as fresh trade fears inspire risk-off
* Germany's DAX down 1.5 pct
* Euro zone bond yields edged down
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 $1 trillion, the most for a U.S.-listed company, and helped lift some U.S. indexes.
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. L1N1TG1DV
“It's 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 2.8 percent to as high as $207.05, 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 36.87 points, or 0.15 percent, to 25,296.95, the S&P 500 .SPX gained 9.06 points, or 0.32 percent, to 2,822.42 and the Nasdaq Composite .IXIC added 69.55 points, or 0.9 percent, to 7,776.84.
The Nasdaq and benchmark S&P indexes had opened lower, but began to turn positive as the advance in Apple shares took 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 down by a 1.8 percent fall in Chinese H-shares .MICN00000PUS. .
Benchmark U.S. government bond yields edged lower as the market sought safe-haven debt in Treasuries amid the trade dispute. 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 held steady on the news after falling 11 percent since April to its lowest in a year. gold XAU= dropped 0.1 percent to $1,214.60 an ounce. U.S. gold futures GCcv1 fell 0.37 percent to $1,223.10 an ounce.1.1613
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 that crude inventories at Cushing, Oklahoma, delivery hub for U.S. crude, dropped 1.1 million barrels since Friday, July 27. crude CLcv1 rose 1.98 percent to $69.00 per barrel and Brent LCOcv1 was last at $73.40, up 1.4 percent on the day.