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S&P 500 climbs to new high as Irma loses force

NEW YORK - U.S. stocks surged to new highs Monday after Hurricane Irma weakened without causing as much damage as many had feared.

The Standard & Poor's 500 index rose 27 points, or 1.1 percent, to close 2,488, a record. The Dow Jones industrial average added 256 points, or 1.2 percent, to 22,055, it biggest one-day jump since March. The Nasdaq composite jumped 72 points, or 1.1 percent, to 6,432. The Russell 2000 index of smaller-company stocks added 15 points, or 1.1 percent, to 1,414.

Irma weakened shortly before it came ashore Sunday, and it is still battering Florida and Georgia. It's caused severe flooding and knocked out power to millions. While the damage is still being assessed, small insurers, especially ones that do a lot of business in Florida, climbed Monday as investors anticipate they won't have to pay out as much in claims as it looked like they would last week.

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Global investors were also relieved after a North Korean national holiday passed without any other actions that would raise tensions between that country and the U.S. Bond prices fell, sending yields higher. That helped bank stocks because rising yields mean banks can charge higher interest rates on loans.

The standoff between the U.S. and North Korea and worries about the damage from hurricanes Harvey and Irma had weighed on the market in the last month, and Monday's jump canceled out those losses.

"This is what happens when the market sells off in the face of what is really an awfully good fundamental environment," said Jim Paulsen, chief investment strategist for the Leuthold Group. He said investors are once again focused on strong economic growth in the U.S. and many other regions.

And while a gridlocked federal government hasn't done much to stimulate the economy, Paulsen said the weakening dollar and falling interest rates could give U.S. businesses a big boost.

"That's a huge stimulative force," he said.

U.S., North Korea trade threats after hydrogen bomb test

North Koreans observed 69th anniversary of the country's founding, but it the country did not test another intercontinental ballistic missile, as South Korea's government had warned it might do. Rising tensions between the U.S. and North Korea have weighed on stocks in recent weeks and raised the prices of gold and bonds.

Bond prices sank. The yield on the 10-year Treasury note rose to 2.12 from 2.05 percent.

Benchmark U.S. crude rose 59 cents, or 1.2 percent, to $48.07 a barrel in New York while Brent crude, used to price international oils, added 6 cents to $53.84 a barrel in London.

In another sign investors were willing to take more risks, gold lost $15.50, or 1.1 percent, to $1,335.70 an ounce. Silver fell 22 cents, or 1.2 percent, to $17.90 an ounce. Copper added 2 cents to $3.07 a pound.

Wholesale gasoline lost 1 cent to $1.63 a gallon. Heating oil fell 2 cents to $1.74 a gallon. Natural gas rose 6 cents to $2.95 per 1,000 cubic feet.