Dollar recovers

NEW YORK: The dollar fell and global stock markets edged higher on Wednesday after China retaliated in a trade dispute with the United States, but Wall Street rebounded from a steeply lower opening on the notion a tariff war has not begun and any impact is too early to foresee.

Oil prices slipped to a two-week low as the speed with which Beijing responded to U.S. measures, within 11 hours, raised the prospect of a quickly spiraling dispute that could crimp the global economy, including the demand for crude.

Gold hit a one-week high, while prices of U.S. Treasury securities and German bunds gained on safe-haven buying.

Boeing and Caterpillar led a slide in big U.S. manufacturers and technology companies that bore the brunt of the U.S.-Chinese dispute, while Germany´s exporter-heavy DAX index fell more than its large European market counterparts.

Still, stocks on Wall Street and in Europe pulled back from more than 1 percent declines, with the FTSE in London closing higher and the three major U.S. indexes later turned positive.

"The market is overreacting to this trade news," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. "These tariffs won´t be implemented for a little while.