The FTSE 100 fell by more than 100 points as global investors continued to act on North Korea-related jitters.
The Dow slid as declines in shares of Apple and those of Goldman Sachs, recently down 2.3 per cent and 1.7 per cent respectively, outweighed gains in shares of McDonald's and those of Coca-Cola, recently up 1.4 per cent and 0.5 per cent respectively.
Gold enjoyed another strong session as traders sought out safe havens, with the price lifting 0.1% to 1,287.8 U.S. dollars an ounce.
US stock index futures were lower on Friday as the escalating war of words with North Korea drove investors to seek safety in low-risk assets.
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The Japanese yen last strengthened 0.03 per cent versus the greenback at 109.22 per dollar.
Japanese markets were closed for a holiday but the yen powered on, hitting an eight-week high of 108.91 yen to the dollar, adding to its biggest weekly gain since May. "Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist, at Scotiabank in Toronto.
The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819.
A small rise in a measure of USA consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favourable to equity investors.
"If earnings can stay strong and interest rates remain low investors can look beyond North Korea and continue to rally equities", Phipps said.
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. Prices for bonds and gold headed higher.
Oil futures prices rose Wednesday after US government data showed a fall in crude-oil inventories. In economic news productivity, or how many goods and services US workers produce an hour, rose at an annual rate of 0.9% in the second quarter from the previous three months, the Labor Department said Wednesday.