For the week the S&P fell 1.4 percent and the Dow lost 1.1 percent - their largest weekly drops since the week ending March 24 - and the Nasdaq was off 1.5 percent.
Thin liquidity could also amplify market moves, she added, with markets in Singapore closed for a public holiday and many market participants in Japan taking time off this week ahead of a public holiday on Friday.
The Korean story has seen the yen gain around 1.5 percent this week, its biggest rise since mid-May. The U.S. currency was down 0.15 percent at 110.140 yen, edging towards a seven-week low of 109.850 set last week.
Gold futures continued to rise Friday morning, ahead of inflation data and as tensions between North Korea and the U.S. escalated. The stock fell $1.01 to $22.02.
Origin Energy fell 2.1 per cent to $6.88, Santos was down 1.8 per cent to $3.33, Oil Search declined 1.1 per cent to $6.41 and Woodside Petroleum shed 0.6 per cent to $29.02. Macy's was down 4.4 percent after the company said its sales continued to decline in the second quarter.
Benchmark 10-year notes last rose 5/32 in price to yield 2.2255%, from 2.242% late on Wednesday. While the U.K.'s FTSE 100 Index has fallen by 0.8 percent, the German DAX Index and the French CAC 40 Index are down by 1.5 percent and 1.8 percent, respectively.
Gold-related stocks were well-supported with Newcrest Mining up 2.1 per cent at $21.85 and Evolution Mining up 2.2 per cent to $2.34.
The Labor Department also said unit labor costs rose by 0.6 percent in the second quarter following an upwardly revised 5.4 percent spike in the first quarter.
USA crude was down 0.9 percent at $48.16 per barrel, on track for a weekly loss of 2.9 percent. Brent crude, used to price global oils, added 26 cents to $52.96.
In company news, News Corp shares dropped by $1.00, or 5.4 per cent, to $17.40 after the company reported a full-year loss of $US643 million ($A818 million), courtesy of lower ad revenues in its news business, and writedowns of fixed assets at its Australian and United Kingdom newspapers and its investment in Foxtel.
Gold added $10.80, or 0.8 percent, to settle at $1,290.10 an ounce.
REA Group shares fell $4.07 cents, or almost six per cent, to $64.35 after its full-year net profit slipped 19 per cent to $206.3 million.
The spot price of gold in Sydney at 1700 AEST was $US1,285.47 per fine ounce, from $US1,278.48 per fine ounce on Thursday. The euro was at $1.1742-1743, down from $1.1807-1808, and at ¥128.96-98, down from ¥130.57-57. Tokyo's Nikkei 225 tumbled 1.3 percent to 19,738.71 while Seoul's Kospi fell 1.1 percent to 2,368.39.
Earlier, the dollar slipped as low as 108.91 yen, its weakest level since June 14, when the greenback fell as low as 108.81 yen. Against the euro, the dollar is valued at $1.1741 compared to yesterday's $1.1752.