* NATO says Russian troops massing on Ukraine border
* Euro stocks tumble, Wall Street shakes off early weakness
* German industrial orders slide, sanctions bite
* Investors seek refuge in German bonds, yields hit new lows (Adds oil settlement prices)
By Chuck Mikolajczak
NEW YORK, Aug 6 European stocks fell on Wednesday as concerns over a Russian troop build-up on the border with Ukraine sent nervous investors into high-rated bonds, while U.S. stocks managed a slight gain to hold support levels.
The S&P 500 is down more than 3 percent since its most recent record high on July 24, including a drop of nearly 1 percent on Tuesday on concerns of Russian escalation in Ukraine.
But the benchmark index was trading modestly above 1,920, a key technical support level, and also managed to bounce from its 100-day moving average, another support level.
"Europe was in an early stage recovery early in the year and it seemed like Europe had finally turned the corner and they were in a nascent recovery and now this Russian thing has thrown a monkey wrench into that, short term," said Doug Foreman, chief investment officer at Kayne Anderson Rudnick Investment Management in Los Angeles.
"Now you have questions about the sustainability of that recovery over there, so that is bothering their markets, that is bothering our market a little bit and until it gets resolved it is going to continue to be a problem area of the markets."
The Dow Jones industrial average was up 20.04 points, or 0.12 percent, at 16,449.51. The Standard & Poor's 500 Index was up 0.95 points, or 0.05 percent, at 1,921.16. The Nasdaq Composite Index was up 6.19 points, or 0.14 percent, at 4,359.02.
NATO said on Wednesday that Russia has amassed around 20,000 combat-ready troops on Ukraine's eastern border and could use the pretext of a humanitarian or peace-keeping mission to invade.
The euro hit a nine-month low of $1.331 against the dollar amid threats of retaliatory Russian sanctions against the European Union and signs the crisis in Ukraine was affecting Germany, Europe's biggest economy. But it managed to bounce back and was up slightly at $1.3377.
German industrial orders slid in June at the steepest rate since September 2011, and the economy ministry said political tensions had probably led to more consumer caution.
The FTSEurofirst 300 closed down 0.8 percent while MSCI's world equity index shed 0.2 percent. Dollar-traded Russian stocks stumbled 2.6 percent to touch their lowest level since May 6.
German 10-year bond yields were down 7 basis points at 1.104 percent after earlier hitting a record low of 1.096 percent.
Yields on lower-rated peripheral bonds rose, extending losses after data showed Italy, the bloc's third-largest economy, had unexpectedly slipped back into recession.
The ECB, which is due to meet on Thursday, has made unprecedented policy moves in recent months to try to keep the bloc's fragile recovery on track.
Portuguese bonds were the worst hit on Wednesday, their yields rising 10 bps to 3.79 percent. The country's main bourse dropped 4 percent to hit its lowest level in over a year, with financial stocks suffering on concerns about fallout from a rescue plan for ailing Banco Espirito Santo.
The benchmark 10-year U.S. Treasury note was up 3/32, the yield at 2.473 percent.
The European Union and the United States last week adopted tough new sanctions against Russia over its actions in Ukraine, marking a new phase in the biggest confrontation between Moscow and the West since the Cold War.
Russian Prime Minister Dmitry Medvedev threatened on Tuesday to retaliate for the grounding of a subsidiary of national airline Aeroflot because of EU sanctions, with a newspaper reporting that European flights to Asia over Siberia could be banned.
Risk aversion and improving U.S. economic data, which continued on Wednesday with a narrowing of the trade deficit, helped lift the dollar index to as high as 81.716, an 11-month high against a basket of major currencies before it pared gains to 81.41.
Brent crude settled down 2 cents to $104.59 a barrel while U.S. crude settled down 46 cents at $96.92 after inventory data showed a smaller drop than announced in a separate report on Tuesday. (Editing by Dan Grebler)