A Chinese state-run newspaper said on Friday that China should make clear that it will stay neutral if North Korea launches an attack that threatens the United States, but that if the USA attacks first and tries to overthrow North Korea's government, China will prevent it doing so.
Japanese stocks finished slightly lower after a choppy session on Thursday, as investors kept a wary watch on tension over North Korea ahead of Japan's long weekend.
At least 3.5 million young people and retired soldiers have joined the North Korean military to fight in the event of a war against the U.S., state media said, adding that people are rising up "to retaliate against" Washington.
Earlier this week, Trump said the U.S. would unleash "fire and fury" on North Korea if it continued to threaten the U.S. North Korea has announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers. The stock lost 78 cents to $3.93. The Stoxx Europe 600 fell 1%.
The utilities index, often seen as a bond proxy because of its companies' slow, reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 percent gain.
BONDS: Bond prices were rose.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in July, matching the increases seen in the three previous months.
The euro slid 0.2 percent to 129.47 yen, and gained 0.1 percent against the dollar to $1.1761. Perrigo rose $1.58, or 2.1 percent, to $78.43.
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Stocks saw some strength during trading on Friday, regaining ground following the sell-off seen in the previous session. Netflix also fell, giving up $4.57, or 2.6 percent, to $173.79. The stock lost $2.80 to $9.04. The FTSE 100 index of leading British shares was 0.6 percent lower.
OIL: Benchmark U.S. crude lost 24 cents to $48.37 per barrel on the on the New York Mercantile Exchange while Brent crude, used to price global oils, declined 20 cents to $51.70 per barrel in London.
United States gold futures for December delivery climbed 1% to $1,291.80 per ounce.
The market volatility - the VIX index, nicknamed " the fear index, had been dashed the night before - remained high compared to the evolution since the beginning of the year. The yield on the 10-year Treasury note fell to 2.22 percent from 2.26 percent late Tuesday.
ASIA'S DAY: Earlier, Asia bore the brunt of the mounting geopolitical uncertainty, with South Korea's Kospi index closing down 1.7 percent at 2,319.71 and Hong Kong's Hang Seng ending 2 percent lower at 26,883.51.
The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the election. Brent crude, the worldwide standard, lost 23 cents to $52.14 a barrel in London.
The dollar inched lower to 109.99 yen on Thursday, holding above Wednesday's low of 109.56 yen, which was the greenback's lowest level since June 15.