President Donald Trump said on Tuesday that US threats from Pyongyang would be met with "fire and fury", which prompted North Korea to say it was considering plans for a missile strike on the USA pacific territory of Guam.
WALL STREET: Losses in health care and consumer-focused companies pulled US stocks lower, snapping a 10-day winning streak for the Dow Jones industrial average. Still, he said, "the Washington, D.C., bedlam and North Korea's saber-rattling is muddying the broader landscape".
Friday was a bit different, as most markets rose. Sony Corp. shares in Tokyo dropped 1.6 percent.
The Dow Jones industrial average closed up 14 points, a gain of 0.07 percent, the Nasdaq composite rose almost 40 points or 0.64 percent and the S&P 500 gained 3 points or 0.13 percent. Energy stocks fell along with crude prices as investors kept an eye on the latest company earnings and geopolitical news.
Money also flowed into consumer discretionary stocks. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.
Stocks had pushed into positive territory, but dropped in the last hour of trading after President Donald Trump warned Pyongyang it will face "fire and fury" if it continues to threaten the United States.
Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, said: "While the tough talk about the potential for war (between the USA and North Korea) is scary, investors have heard it many times before". And when the S&P 500 breaks a streak of 50+ trading days without a 1%+ up move, the index actually averages a decline over the next month and a gain of just 0.86% over the next three months. The Nasdaq composite lost 0.2 percent, to 6,370.46.
Markets were also lower in Europe and Asia.
'Equity markets have behaved as you would expect by selling off sharply, an entirely predictable outcome at any time but more so when volatility levels are as low as they are, which now suggests that these moves lower have the potential to gather pace until the rhetoric gets dialled back'.
The benchmark US yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor.
The Dow slid as declines in shares of Apple and those of Goldman Sachs, recently down 2.3 percent and 1.7 percent respectively, outweighed gains in shares of McDonald's and those of Coca-Cola, recently up 1.4 percent and 0.5 percent respectively.
Beyond geopolitical concerns, investors continued to size up company earnings reports.
Stocks are opening slightly lower on Wall Street after several companies reported disappointing results.
Benchmark US crude fell 22 cents to 49.17 dollars a barrel on the New York Mercantile Exchange. Netflix lost 1.5 per cent.