US STOCKS-S&P 500 bounces back from early lows; Nasdaq higher

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* U.S. 10-year yields fall
* Disney drops after earnings miss
* Indexes up: Dow 0.05%, S&P 0.24%, Nasdaq 0.49%

(Updates to late afternoon; changes dateline, byline)
By Caroline Valetkevitch
NEW YORK, Aug 7 (Reuters) - The S&P 500 recovered from steep
early losses to trade modestly higher by late afternoon on
Wednesday as investors snapped up oversold shares, although
signals from the bond market of a higher risk of recession kept
a lid on gains.
"As we've cut the losses in half by lunch and continued to
move higher, it's become a matter of buyers remaining interested
in continuing to buy stocks that they feel have been oversold
and a lack of sellers' supply," said Michael James, managing
director of equity trading at Wedbush Securities in Los Angeles.
Trading was choppy, however, and focus remained on interest
rates.
U.S. Treasury yields tumbled, with 30-year yields
approaching record lows, on increasing worries over a global
economic downturn and bets the Federal Reserve will have to pick
up its pace of interest rate cuts to counter growing recession
risks.
Financials .SPSY have been the biggest loser among S&P 500
.SPX sectors, down about 1.5%.
Interest rates futures suggested traders are building bets
the Fed will cut interest rates three more times by year-end.
The premium on three-month Treasury bill rates over 10-year
Treasury yields, a closely watched U.S. recession indicator, was
at its most elevated levels since March 2007.
The Dow Jones Industrial Average .DJI rose 12.13 points,
or 0.05%, to 26,041.65, the S&P 500 .SPX gained 6.79 points,
or 0.24%, to 2,888.56, and the Nasdaq Composite .IXIC added
38.21 points, or 0.49%, to 7,871.48.
Central banks in New Zealand, India and Thailand on
Wednesday cut their lending rates amid growing fears that the
U.S.-China trade war could aggravate a slowdown in the global
economy.
Trade concerns remerged after President Donald Trump last
week threatened to slap 10% levies on the rest of $300 billion
of Chinese imports and called China a currency manipulator on
Monday. The energy sector .SPNY was down more than 1% after oil
prices slid while real estate was up the most of any S&P sector.
Declining issues outnumbered advancing ones on the NYSE by a
1.10-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored advancers.
The S&P 500 posted 17 new 52-week highs and 31 new lows; the
Nasdaq Composite recorded 37 new highs and 202 new lows.