Financial companies and department store operators were among the big decliners.
U.S. markets fell on Wednesday morning, spooked by rising tension between the USA and North Korea.
The yen on Friday added to a strong weekly rally against the dollar of close to 1.5 percent, hitting its highest level versus the greenback in nearly four months, at 108.73 yen. The Nasdaq composite lost 99 points, or 1.6 percent, to 6,252. The Russell 2000 index gave up 24.40 points, or 1.8 percent, to 1,372.54.
Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger. Japan and South Korea vowed a strong reaction if the North were to go through with the plan. US gold futures gained 0.50 percent to $1,296.60 an ounce.
TECH SLIDE: Losses among technology stocks led the market slide.
The 30-year bond last rose 6/32 in price to yield 2.7847 percent, from 2.794 percent late on Thursday.
Retailers were also falling Thursday. On the Nasdaq, 2,303 issues fell and 567 advanced. Its shares tumbled $13.09 to $60.25.
UNDERCOOKED: Blue Apron slumped 17.1 percent after the meal kit seller reported a sequential decline in customers in the second quarter due to a planned reduction in marketing. Economists had expected prices to rise by 0.2%.
Data showed US producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.
In commodities trading, crude oil futures are slipping USD0.10 to USD48.49 a barrel after tumbling USD0.97 to USD48.59 a barrel on Thursday. Brent crude, used to price worldwide oils, slid 80 cents, or 1.5 percent, to $51.90.
Gold held steady at two-month high with spot gold rising 0.1 percent to $1,287.83 per ounce, putting the precious metal on pace for its biggest weekly gains since April. Copper fell 2 cents to $2.90 a pound. The euro rose to $1.1753 from $1.1752. The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points. While the German DAX Index has edged down by 0.1%, the French CAC 40 Index and the UK's FTSE 100 Index are both down by 1%.
In the United Kingdom, the stock of TV giant ITV was down 1.9 percent in early trading, and Sky shares were down 0.5 percent, while Germany's ProSiebenSat.1 fell 1.2 percent. Australia's S&P/ASX 200 edged down almost 0.1 percent.