Stocks rise despite N. Korea
North Korea’s latest missile launch jolted the U.S. stock market Tuesday, but major indexes pulled back from those early losses and finished higher as the weakening dollar gave technology and industrial firms a boost.
Investors bought bonds, which are traditionally considered safe, after North Korea fired a midrange ballistic missile that crossed over northern Japan and fell into the Pacific Ocean. 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 stay on the sidelines. “Buying on the dips is going to continue as long as [company] earnings continue to move forward,” she said.
As the dollar declined to 2½-year lows, companies that do a lot of business outside the U.S. climbed. A weaker dollar boosts their sales and helps their profits when those funds are converted back into dollars.
The dollar is down almost 10% in 2017, at its lowest point in more than a year. The euro is at two-year highs.
Defense contractors climbed. Raytheon advanced 2.2% to $182.11.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.12% from 2.16%. Banks fell as investors expected them to make less money from lending.
Insurers fell as investors wondered if those firms face big losses from Tropical Storm Harvey. MetLife fell 1.8% to $46.73. Companies that drill for oil in the gulf or onshore in Texas declined as investors worried about potential lost production because of the storm.
Benchmark U.S. crude fell 13 cents to $46.44 a barrel. Brent crude rose 11 cents to $52 a barrel in London. Wholesale gasoline jumped 6 cents, or 4.1%, to $1.78 a gallon, a two-year high. Heating oil rose 3 cents to $1.67 a gallon. Natural gas rose 4 cents to $2.96 per 1,000 cubic feet.
Sporting goods firms slid again after Finish Line forecast weak quarterly results and slashed its forecasts for the rest of the year. Its stock dived 18.4% to $8.50. Foot Locker fell 1.5% to $35.16. Nike fell 1.9% to $52.73.
Electronics retailer Best Buy had a solid second quarter and raised its forecasts for the year, but its stock sank 11.9% to $55.02 after its chief executive said he does not think sales will stay as strong as they were last quarter.
Gold climbed $3.60 to $1,318.90 an ounce, its highest price since late September. Silver fell 2 cents to $17.43 an ounce. Copper rose 2 cents to $3.08 a pound.
The dollar rose to 109.71 yen from 109.09 yen. The euro rose to $1.1992 from $1.1979.