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* Stock rally pauses on report Trump threatens new China tariffs
* Canada's foreign minister says "We're not there yet"
* Ford drops on ending plans to sell Chinese-made vehicle in U.S.
Energy stocks drop the most on the S&P 500
* Indexes: Dow off 0.29 pct, S&P 0.19 pct; Nasdaq up 0.16 pct (Updates to early afternoon)
By Shreyashi Sanyal
Aug 31 (Reuters) - The S&P 500 and the Dow Jones Industrial Average dipped on Friday as jitters over ongoing trade talks between the United States and other major economies weighed, but gains in Apple and Amazon kept Nasdaq slightly higher.
Hampering a rally in U.S. stocks early this week was a report that President Donald Trump was ready to impose tariffs on $200 billion more of Chinese goods as soon as a public comment period on the plan ends next week.
The United States is also working to settle differences on a pact to modernize the North American Free Trade Agreement (NAFTA) by a Friday deadline.
Canadian Foreign Minister Chrystia Freeland said, "We're not there yet" and added the country was looking for a good deal, not any deal, while Trump is reported have said that any trade deal with Canada would be "totally on our terms," according to the Toronto Star.
"The markets are amidst a trade trifecta today, with China, Canada and the U.S. and it's likely to weigh on sentiment this afternoon due to pre-holiday light trading," said John Augustine, chief investment officer at Huntington Private Bank in Columbus, Ohio.
At 12:51 p.m. ET, the Dow Jones Industrial Average was down 74.88 points, or 0.29 percent, at 25,912.04, the S&P 500 was down 5.59 points, or 0.19 percent, at 2,895.54 and the Nasdaq Composite was up 13.12 points, or 0.16 percent, at 8,101.49.
Despite the trade tensions that dominated much of the year, the main indexes have inched to record levels, helped by solid earnings and economic data pointing to a strong U.S. economy.
Apple rose 1.4 percent, extending its gains for the seventh day, while Amazon.com rose 0.4 percent, providing the biggest boost to the Nasdaq.
Eight of the 11 major S&P 500 sectors were lower, with a 1.07 percent drop in the energy sector leading the decline.
Ford dropped 2.3 percent after the automaker said it has abruptly abandoned a plan to sell a Chinese-made small vehicle in the United States because of the prospect of higher U.S. tariffs.
General Motors was down 1.4 percent.
Goodyear Tire & Rubber dropped 4.8 percent after brokerage Berenberg downgraded the stock to "hold".
Declining issues outnumbered advancers for a 1.20-to-1 ratio on the NYSE. Advancing issues outnumbered decliners for a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and 2 new lows, while the Nasdaq recorded 87 new highs and 22 new lows. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)