* Dollar up vs yen, pares losses vs Swiss Franc
* Wall Street edges higher
* Yields fall on safety buying (Updates to afternoon U.S. trading, adds settled oil prices)
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.
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 was in check late in the U.S. trading session.
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.
MSCI’s world index, which tracks shares in 46 countries, was down 0.2 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.
“This (North Korea) is all sort of tangential to (the) American corporate economy and profitability,” said Stephen Massocca, senior vice president at Wedbush Securities.
“It is kind of a thin field this week, so it’s not tough to move stuff around. I didn’t see it as something to have a significant impact on the market and lo and behold everything has rallied back.”
The Dow Jones Industrial Average rose 54.17 points, or 0.25 percent, to 21,862.57, the S&P 500 gained 3.86 points, or 0.16 percent, to 2,448.1 and the Nasdaq Composite added 26.04 points, or 0.41 percent, to 6,309.06.
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 2.1345.
Gold, considered a good store of value during volatility in other markets, jumped to its highest since November before reversing course to trade down 0.19 percent to $1,307.01.
The dollar index, which measures the greenback against a basket of six major currencies, was 0.03 higher at 92.236 after earlier hitting 91.621, its lowest since mid-January 2015.
“Things have kind of settled down with Korea,” said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman in New York.
“In the past it has always been you have knee-jerk selling... but it eventually wears off.”
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 hurricane 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