Stocks cut losses and close higher: Dow up 57 points

NEW YORK – U.S. Stocks pulled back from steep early losses and closed higher Tuesday.

The dollar is down to its lowest level in two and a half years, and that is helping industrial and technology companies, which do a lot of business overseas.

Investors are buying bonds, traditionally considered safe assets, after North Korea launched a midrange ballistic missile that crossed over northern Japan and fell into the Pacific Ocean.

The Standard & Poor’s 500 index rose 2 points, or 0.1%, to 2446. The Dow Jones industrial average bounced back from a 134-point loss and gained 57 points, or 0.3%, to 21,865. The Nasdaq composite added 19 points, or 0.3%, to 6,302.

North Korea fired a ballistic missile over Japan late Monday. It’s believed to be the first time the country has sent a missile over Japan, and it seemed designed to show that North Korea can back up a threat to target the U.S. Territory of Guam.

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As investors bought bonds, prices rose. The yield on the 10-year Treasury note fell to 2.13% from 2.16%. Lower bond yields translate to lower interest rates, and banks fell as investors expected them to make less money from lending.

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The dollar rose to 109.71 yen from 109.09 while the euro rose to $1.1992 from $1.1979. The European currency is at its highest level in more than two years, as European Central Bank leaders do not seem poised to take action about its strength.

The dollar has fallen 10% so far this year. It hasn’t taken a loss that large since 2003.

“It was a double whammy for investors and that’s why we saw futures down so much,” said Karyn Cavanaugh, senior market strategist at Voya Investment Strategies. But she said investors are unlikely to sell and stay on the sidelines because much of the global economy is growing in sync. That will help company results.

“Buying on the dips is going to continue as long as earnings continue to move forward because investors know the market is going to continue to follow those earnings,” she said.

The Gulf Coast region continued to absorb heavy rains from Tropical Storm Harvey. More than 30 inches have fallen in some areas, leading to widespread flooding, and close to two feet more could fall over the next few days. Tens of thousands of people are seeking refuge in shelters.

On Wall Street, insurers continued to fall as investors wondered if the storm and flooding will lead to big losses. MetLife fell 1.8%.

Companies that drill for oil in the Gulf or onshore in Texas are falling as investors worry about potential lost production. Anadarko Petroleum gave 1.4% and Apache slumped 1.3%.

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Benchmark U.S. Crude gave up 13 cents to $46.44 a barrel in New York. Brent crude, the international standard, picked up 11 cents to $52 a barrel in London. The price of wholesale gasoline jumped another 6 cents, or 4.1 percent, to $1.78 a gallon.

Finish Line forecast weak second-quarter results and the retailer cut its forecasts for the rest of the year. It said discounts on shoes are growing, which is hurting its profit margins. Its stock tumbled 18.5%. It was just the latest in a series of dire reports from sporting goods companies. Under Armour lost 2.9% and Foot Locker shed 1.5%. Nike lost 1.9%.

Electronics retailer Best Buy had a solid second quarter and raised its forecasts for the year, but its stock sank after CEO Hubert Joly said he does not think the chain’s sales will stay as strong as they were in the most recent quarter. Its shares fell 11.9%.

Gold climbed $3.60 to $1,318.90 an ounce and remains at its highest price since late September. Silver lost 2 cents to $17.43 an ounce. Copper rose 2 cents to $3.08 a pound.

Germany’s DAX slid 1.5 percent and the CAC 40 in France fell 0.9%. The FTSE 100 index in Britain lost 0.9%. Asian indexes had a smaller reaction. In Japan, the benchmark Nikkei 225 slid 0.5% and South Korea’s Kospi lost 0.2%. In Hong Kong, the Hang Seng shed 0.1%.

AP Business Writer Yuri Kageyama in Tokyo contributed to this report.

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