Stocks slide on continued concern over tension between United States and North Korea

US stocks closed lower for the third day in a row Thursday, led by declines in technology companies and banks, two of the highest-performing sectors over the past year.

KOREA JITTERS: With President Donald Trump warning North Korea of "fire and fury", investors have become concerned that the war of words between Washington and Pyongyang could escalate. I'd look into energy, materials, industrials, tech and financials.

The Swiss franc, the other traditional safety-play among currencies, has benefited too.

And in bond markets, 10-year U.S. Treasuries and Germany's ultra-safe government bonds, known as Bunds, were trading at their highest prices since June.

"For quite some time the market hasn't really reacted to things on the Korean Peninsula because we know from the past it is largely North Korean sabre-rattling, and it may yet be".

Disappointing company earnings also helped pull the market lower, with financial and consumer-focused companies outweighing gains among health care stocks.

The S&P is trading near its most expensive valuation level since 2004, as measured by the price-to-12-month forward earnings ratio. The euro zone's version is at its highest since April, when France's election was rattling the region.

While the Russell 2000 index ended up 0.1 percent on the day, it was more than 5 percent below its July 25 record close and for the week it fell 2.7 percent, its biggest weekly drop since February 2016.

His comments came in response to North Korea's threat to fire ballistic missiles toward the USA territory of Guam, which is home to US bombers and other strategic assets.

The focus on North Korea has largely overshadowed a Labor Department report showing an unexpected drop in United States producer prices in the month of July. "You're less than 2 percent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers", said Lerner. "Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

United Kingdom mid-cap Dixons Carphone was the worst-performing, falling 7.6 percent after a top-rated Exane BNP Paribas analyst cut the retailer by two notches to "underperform", citing concerns about its mobile business.

The S&P/TSX composite index was down 39.02 points to 15,217.33, with most sectors finishing in the red while bullion stocks surged almost 1.9 per cent.

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.

According to ING's chief Asia economist Robert Carnell, the whole situation resembles a new Cuban Missile Crisis.

Rio Tinto, Glencore, Antofagasta, Anglo American, BHP Billiton and Arcelormittal all fell 2.3 to 4.1 percent.

Crude futures meanwhile extended losses on fears of slowing demand and lingering concerns over global oversupply.

Banks also fell 2 percent, putting the index on track for its worst week in nine months.

Wall Street closed sharply lower, with Dow Jones down over 200 points on Thursday.