Trump escalates North Korea tension

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The Standard & Poor's 500 index fell 3 points, or 0.1 percent, to 2,471 as of 12:16 p.m.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories.

About 7.5 billion shares changed hands on US exchanges, well above the 6.25 billion average for the last 20 days.

Shares of Michael Kors (KORS.N) jumped 22.3 percent, helping to boost the consumer discretionary index.SPLRCD, after the luxury goods maker raised its full-year revenue forecast.

But U.S. stocks regained some lost ground, despite Trump's comments Friday that U.S. weapons are "locked and loaded", ready to respond if North Korea acts "unwisely".

"Should the North Korea situation develop it may just prove to be the catalyst to push the institutional world to commit flows back to this asset class on a sustained basis", he said. The Nasdaq added 39.68 points, or 0.6 percent, to 6,256.56.

"What has changed this time is that the scary threats and war of words between the USA and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney.

Gold and bond prices were headed higher.

North Korea claimed "only absolute force" can work on someone as "bereft of reason" as Trump and detailed plans to fire a salvo of missiles into waters around the U.S. Pacific territory of Guam.

The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a auto hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%. Pyongyang said it was examining plans for attacking Guam, a USA territory in the Pacific with a military base.

After a dip of as much as 0.52 percent earlier in the day, Wall Street's three major indexes bounced off intraday lows.

Dow e-minis were down 54 points, or 0.25 percent, with 25,272 contracts changing hands.

The technology sector was the S&P's biggest drag with a 2.2 percent drop.

Korea's Kospi dropped 1.7%, cementing a weekly loss of 3.2%.

Mounting tensions between the United States and North Korea battered blue-chip stocks on Wednesday, knocking the London market's attempts of securing a record high. The FTSE 100 index of leading British shares was 0.6 percent lower.

The price of gold also surged for the second day in a row as the December bullion contract advanced US$10.80 to US$1,290.10 an ounce.

USA crude was down 0.9 percent at $48.16 per barrel, on track for a weekly loss of 2.9 percent. "That reset is being triggered by North Korea geopolitical concern and stretched valuations", said Peter Kenny, senior market strategist at Global Markets Advisory Group, New York.

The dollar was further weighed Friday by the soft USA inflation data. Humana rose $3.41, or 1.4 percent, to $253.63.

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