* Dollar up vs yen, Swiss Franc
* Wall Street finishes higher
* Yields fall on safety buying (Updates to U.S. market close)
By Saqib Iqbal Ahmed
NEW YORK, Aug 29 (Reuters) - U.S. stocks rebounded from a sharply lower open on Tuesday and helped an index of global equity markets pare losses as investors shrugged off concerns over North Korea’s latest missile test.
Treasury yields were off early lows and the dollar index , which measures the greenback against a basket of six major currencies, traded little changed on the day.
The dip in risk appetite that dominated most of the trading session and sent benchmark 10-year U.S. Treasury yields lower and gold to a more-than-nine-month peak gave way as the U.S. trading session progressed.
MSCI’s world index, which tracks shares in 46 countries, was down 0.29 percent, after earlier falling as much as 0.57 percent to a one-week low on heightened worries about North Korea.
North Korea fired a ballistic missile over Japan’s northern Hokkaido island into the sea on Tuesday, prompting a warning from U.S. President Donald Trump that “all options are on the table” as the United States considers its response.
“When the President says ‘All options are on the table,’ the best strategy for investors is sometimes to do nothing,” said Brian Jacobsen, senior investment strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
Market analysts were relieved that the rift did not escalate further, with Trump’s focus on the devastation caused by Tropical Storm Harvey, the most powerful hurricane to strike Texas in 50 years when it made landfall last week.
“While it’s possible all these unfortunate events can add up to something more consequential, the economy is pretty darn big and resilient,” Jacobsen said.
The Dow Jones Industrial Average rose 56.97 points, or 0.26 percent, to finish at 21,865.37, the S&P 500 gained 2.06 points, or 0.08 percent, to close at 2,446.3 and the Nasdaq Composite added 18.87 points, or 0.3 percent, to end at 6,301.89.
Geopolitical tensions and a surging euro sent European shares to their lowest in six months. The pan-European STOXX 600 ended the session down 1 percent.
Benchmark 10-year Treasury prices rose on safety buying, but some reluctance to buy bonds at their lowest yields of the year capped the rally.
Benchmark 10-year Treasury yields fell as low as 2.086 percent, before edging back up to 2.1292.
Gold, considered a good store of value during volatility in other markets, jumped to its highest since November before reversing course to trade down 0.04 percent to $1,307.01.
The dollar index, which measures the greenback against a basket of six major currencies, was 0.22 higher at 92.406 after earlier hitting 91.621, its lowest since mid-January 2015.
The rebound in U.S. stock appears to have calmed some of the fears that were weighing on the dollar, said Shahab Jalinoos, global head of FX strategy at Credit Suisse in New York.
“All that Korea news you can still classify in the ‘known unknown’ category,” he said.
“None of it is anything the market has never seen before, so the market’s capacity to bounce back from that was really high.”
Crude oil prices, which dropped more than 1.5 percent as the market grappled with the shutdown of more than 16 percent of refining capacity in the United States after a tropical storm ripped through the heart of the country’s oil industry, recovered ground to settle little changed on the day.
Brent crude futures rose 11 cents to settle at $52.00 a barrel, while U.S. crude futures settled at $46.44, down 13 cents.
Reporting by Saqib Iqbal Ahmed; Additional reporting by Chuck Mikolajczak and Sam Forgione in New York, Eric Onstad in London, Sruthi Shankar and Tanya Agrawal in Bengaluru; Editing by Dan Grebler