* Microsoft hits record high on strong results
* Trump threatens tariff on $500 bln worth of Chinese goods
* Trump's Fed criticism sends long-dated U.S. bond yields higher
* GE dips on cut in cash target forecast
* Indexes down: Dow 0.1 pct, S&P 0.07 pct, Nasdaq 0.01 pct (Updates to late afternoon, changes byline, adds NEW YORK dateline)
By Stephen Culp
NEW YORK, July 20 (Reuters) - U.S. stocks were largely unchanged on Friday as a string of strong earnings led by Microsoft offset escalating trade anxieties driven by U.S. President Donald Trump's latest salvo of tough China tariff threats.
Shares of Microsoft Corp hit a record high and were up 2.0 percent after second-quarter results beat analyst estimates. The company joins Apple Inc and Amazon.com in the race to be the first company worth $1 trillion.
Microsoft's advance provided the biggest boost to all three major U.S. stock indexes.
Trump said he was ready to impose tariffs on $500 billion of Chinese imports, the latest in a series of protectionist moves that have sparked retaliation from U.S. trading partners around the world.
Trump also reiterated criticism of planned interest rate hikes by the Federal Reserve, saying in a Twitter post that tightening U.S. monetary policy would diminish any U.S. trade advantage.
Long-dated U.S. government bond yields rose on worries that the president's comments would encourage Fed Chairman Jerome Powell to slow the pace of rate hikes by the U.S. central bank, which could increase inflationary pressure.
"A president commenting on the Fed is unconventional," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "While some unconventionality can be good, too much can create a big mess. And we could be coming into this phase, given comments on Putin, tariffs and the Fed."
As the second-quarter reporting season gains momentum, analyst estimates have grown more optimistic. Earnings for S&P 500 companies are now seen to have grown 22.0 percent in the quarter compared with the 20.7 percent increase forecast as of July 1.
So far, 87 companies of the S&P 500 have posted results, of which 83.9 percent have beat consensus estimates.
The Dow Jones Industrial Average fell 3.66 points, or 0.01 percent, to 25,060.84, the S&P 500 lost 2.1 points, or 0.07 percent, to 2,802.39 and the Nasdaq Composite dropped 0.46 points, or 0.01 percent, to 7,824.84.
Schlumberger Inc posted a 43 percent jump in North America operations and said it expects to benefit from a recovery in international oil markets. Even so, the oilfield services company's shares were down 0.6 percent.
Diversified manufacturer Honeywell's stock rose 3.8 percent following its earnings beat and forecast hike.
General Electric Co dropped 3.9 percent after the conglomerate reported a smaller-than-expected drop in quarterly profit but trimmed its cash flow target.
Declining issues outnumbered advancing ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.16-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and two new lows; the Nasdaq Composite recorded 99 new highs and 30 new lows. (Reporting by Stephen Culp Editing by James Dalgleish)