North American stock markets climbed back from earlier steep losses Tuesday, amid continuing concerns about the crisis in Japan's nuclear energy industry.

The Canadian dollar fell more than two cents and the Toronto Stock Exchange lost more than 300 points at the open.

The loonie closed at 101.63 cents US Tuesday, down 1.19 cents on the day. Earlier, it was as much as 2.25 cents lower.

Analyst John Curran at CanadianForex says the U.S. dollar is benefiting the most with players seeking a safe haven in treasuries as what is being termed a "demand destructive event" threatens global growth.

'You sell, and you ask questions later'—Avalon economist Peter Cardillo

Dangerous levels of radiation began leaking from a crippled nuclear plant Tuesday, forcing Japan to order 140,000 people to stay indoors. The news sent Japan's benchmark Nikkei 225 stock average down more than 1,000 points, or 11 per cent.

The S&P/TSX Composite Index finished down 72.2 points to 13,547. It had been down as much as 380 points earlier in the session.

"Global markets are really removing their exposure to equities so they're selling off equities and, in turn, trying to look for a safe haven and typically what we see is the U.S. dollar is the one that rallies," said Camilla Sutton, chief currency strategist at Scotia Capital.

"They have the deepest capital markets in the world, the deepest treasury market and that drives an awful lot of flow so we're seeing a global reduction of risk which means globally investors are selling off equity exposure and moving that toward the U.S. dollar."

Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, said fear had taken hold in the market. "It's a situation where you sell, and you ask questions later," he said.

Intraday stock chart for Cameco on the TSX (CBC)

After losing more than 20 per cent out of the gate on Monday, uranium maker Cameco Corp. lost another 10 per cent at Tuesday's opening, but much like the broader index, it too clawed back through the day. It closed up 37 cents, or 1.2 per cent, at $32.07.

Commodities did not follow the strong rebound in stocks.

In New York, oil closed $4.01 US lower at $97.18 US a barrel. The Dow Jones Industrial Average lost 137.74 points to finish at 11,855.42. The NYSE invoked Rule 48 as a pre-emptive strike against the volatility. The rarely used rule allows the exchange to suspend the requirement to disseminate price indications and obtain floor official approval prior to opening. It's designed to discourage panic selling.

Other traditional safe havens were not spared, as gold was $32 US lower at $1,392.60 an ounce.

With files from The Associated Press