Stocks re­bound af­ter Har­vey, N. Korea jolts

Most eq­ui­ties fall, but Dow shakes off early loss, clos­ing higher.

Austin American-Statesman - - BUSINESS - By Mar­ley Jay

North Korea’s latest mis­sile launch jolted the U.S. stock mar­ket Tues­day, but ma­jor in­dexes pulled back from those early losses and mostly fin­ished higher as the weak­en­ing dol­lar gave tech­nol­ogy and in­dus­trial com­pa­nies a boost.

In­vestors bought bonds, which are tra­di­tion­ally con­sid­ered safe as­sets, af­ter North Korea fired a midrange bal­lis­tic mis­sile that crossed over north­ern Ja­pan and fell into the Pa­cific Ocean. It’s be­lieved to be the first time the coun­try has sent a mis­sile over Ja­pan.

En­ergy and in­sur­ance com­pa­nies con­tin­ued to feel the ef­fects of Trop­i­cal Storm Har­vey. The Dow Jones in­dus­trial av­er­age fell 134 points when the mar­ket opened.

“It was a dou­ble whammy for in­vestors,” said Karyn Ca­vanaugh, se­nior mar­ket strate­gist at Voya In­vest­ment Strate­gies. But she said in­vestors are un­likely to sell and re­main 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.

And in­vestors’ fears eased as the day went on. As the dol­lar de­clined to 30-month lows, com­pa­nies that do a lot of busi­ness out­side the U.S. climbed. A weaker dol­lar boosts their sales and helps their prof­its when they are con­verted back into dol­lars.

The Stan­dard & Poor’s 500 in­dex rose 2.06 points, or 0.1 per­cent, to 2,446.30. The Dow Jones in­dus­trial av­er­age gained 56.97 points, or 0.3 per­cent, to 21,865.37. The Nas­daq com­pos­ite added 18.87 points, or 0.3 per­cent, to 6,301.89. The Rus­sell 2000 in­dex of smaller-com­pany stocks picked up 1.45 points, or 0.1 per­cent, to 1,383.68. Still, most of the stocks on the New York Stock Ex­change fell.

The dol­lar has weak­ened in part be­cause a lot of economies in other re­gions are get­ting stronger, which boosts their cur­ren­cies. The dol­lar is down al­most 10 per­cent in 2017, at its low­est point in more than a year, and the euro is at two-year highs.

De­fense con­trac­tors climbed. Raytheon ad­vanced $3.87, or 2.2 per­cent, to $182.11. United Tech­nolo­gies and Rock­well Collins rose af­ter the Wall Street Jour­nal re­ported that the com­pa­nies are close to a deal. United Tech­nolo­gies, which makes jet en­gines, el­e­va­tors and other prod­ucts, jumped $3.37, or 2.9 per­cent, to $118.70, and avi­a­tion elec­tron­ics maker Rock­well Collins rose $2.75, or 2.1 per­cent, to $130.74.

Bond prices rose. The yield on the 10-year Trea­sury note fell to 2.12 per­cent from 2.16 per­cent. Lower bond yields trans­late to lower in­ter­est rates, and banks fell as in­vestors ex­pected them to make less money from lend­ing.

Bench­mark U.S. crude gave up 13 cents to $46.44 a bar­rel in New York. The price of whole­sale gaso­line jumped an­other 6 cents, or 4.1 per­cent, to a two-year high of $1.78 a gal­lon.

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