UPDATE 2-European shares end trade-driven losing run but worries linger

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* European stocks bounce after 3-day rout
* Germany's DAX up 1% as Bayer surges on $3.9 billion deal
* Glencore profit sinks, hits miners

(Updates to close)
By Susan Mathew and Shreyashi Sanyal
Aug 7 (Reuters) - European shares rose on Wednesday,
breaking a three-day losing streak on euphoria over a
multi-billion dollar German chemical deal but gave up some gains
after Wall Street opened sharply lower on recession worries.
The pan-European STOXX 600 index .STOXX closed 0.2%
higher, after having gained as much as 1% during the session
when Bayer BAYGn.DE and Lanxess' LXSG.DE deal to sell
chemical park operator Currenta for $3.9 billion had lifted
stocks.
Bayer's BAYGn.DE 6% jump was the biggest boost to the main
index and helped Germany's DAX .GDAXI shrug off week
industrial output data.
However, all major country indexes in Europe cut some gains,
with Italian .FTMIB and Swiss .SSMI stocks turning negative,
after U.S. stocks plunged as investors were spooked by the
latest signals from bond markets that pointed to heightened risk
of a recession. .N
Investors have been scooping up U.S. government debt since
last week on bets the Federal Reserve would need to cut interest
rates more than it has signalled so far, in a bid to combat
risks from the escalating trade war between China and the United
States. US/
"With such a bad U.S. open and with the dominant story in
the last few days being about U.S.-China trade war, the European
markets have been looking at the U.S. for cues," said Spreadex
analyst Connor Campbell.
In Europe, German long-dated bond yields tumbled to new
record lows as a large rate cut from New Zealand and weak German
data gave further impetus to a relentless rally in bond markets.
GVD/EUR
"We are potentially in the eye of the storm at the moment
and investors are wary that another price tanking headline could
be coming at any moment."
A sell-off in stocks since last week when U.S. President
Donald Trump threatened more tariffs on Chinese goods is
reminiscent of a sharp fall in May when a sudden breakdown in
trade talks had seen European markets post their worst month in
more than three years.
Europe's main index has lost about 5% since last Friday. In
May, it lost 5.7%.
A continued slide in iron ore and oil prices weighed on
material and energy stocks .SXEP , with Glencore Plc's GLEN.L
0.9% slip on a 32% drop in first-half core profit adding to the
material sector's 1% fall.
Novartis NOVN.S was the biggest weight on STOXX 600 after
the Swiss drugmaker said it knew about discrepancies in data
submitted to regulators as it sought approval of its more than
$2 million gene therapy Zolgensma. In Italy, biggest lender UniCredit CRDI.MI lagged after it
cut its revenue target for 2019, but a sharp rise in net profit
at Italian lender Banco BPM BAMI.MI saw its shares post their
best day in over a month.