Seoul shares open lower amid escalating tensions over North Korea

The S&P 500 index had its biggest one-day drop in nearly three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.

Asian shares and U.S. stock futures slipped while U.S. Treasuries, gold and the safe-haven yen rose in early Asian trading on Wednesday after tensions on the Korean peninsula escalated. The Russell 2000 index gave up 24.40 points, or 1.7 percent, to 1,372.54. The S&P 500 closed 0.24% lower at 2,474.92, with materials leading decliners.

The headlines about North Korea served as a spark to jolt investors out of complacency on the heels of an extended period of calm in the market, said McClellan who shared the following chart in a report.

Mattis said North Korea must stop isolating itself and "stand down" in its pursuit of nuclear weapons, and Pyongyang "should cease any consideration of actions that would lead to the end of its regime and the destruction of its people". The contract fell 97 cents, or 2 percent, to close at $48.59 a barrel on Thursday.

The Dow Jones industrial average lost 50 points, or 0.2 percent, to 22,032.

KOREAN STOCKS: Investors didn't panic but saw Trump's comments as a chance to take profits, said Seo Sang Young, a market strategist at Kiwoom Securities in Seoul.

Disney dropped 3.9 percent after reporting a weak quarter and saying it would pull its movies from Netflix and start its own video streaming services.

Meanwhile on the domestic front, US initial jobless claims for the week ended July 29 exceeded consensus estimates (http://www.marketwatch.com/story/US-jobless-claims-rise-by-3000-to-244000-2017-08-10), recording 244,000 versus 240,000 expected this morning. Macy's was down 8.9 percent after the company said its sales continued to decline in the second quarter.

Overall, gold retreated to around $1.285 per ounce later in United States trading.

As impressive as that is, the Dow was only up about 400 points, or 1.8%, during its recent string of records.

The tech-heavy Nasdaq composite bore the brunt of the sell-off, losing 135.46 points, or 2.1 percent, to 6,216.87.

The dollar weakened after news that USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

In currencies, the yen strengthened 0.64 percent versus the greenback at 109.37 per dollar. Humana rose $4.74, or 1.9 percent, to $254.96. Brent crude, used to price global oils, gained 10 cents to $52.24 in London.

European markets closed lower: London's FTSE sank 1.4 per cent, Paris lost 0.6 per cent and Frankfurt dipped 1.2 per cent. Hong Kong's Hang Seng was off 0.3 percent.

Against the Swiss franc, it fared slightly better and was broadly flat on the day at 1.1319 francs per euro.