Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones U.S. defence index was up 1.6 percent after hitting a record high.
In his latest warning to North Korea, US President Donald Trump said on Friday military solutions were "fully in place" and referred to American weapons as being "locked and loaded" should the nuclear-armed nation act "unwisely".
On Thursday, the three major indexes logged their worst performances since mid-May (http://www.marketwatch.com/story/us-stocks-set-up-for-another-day-of-losses-as-north-korean-tensions-simmer-2017-08-10) in a session dogged by escalating tension between the USA and North Korea.
The Nasdaq Composite number was down 16.88 points, or 0.26 per cent, at 6,353.58.
"Markets are looking for any reason at all for a reset".
"That may have weighed a little bit" on markets, said Phil Guarco, global investment specialist at J.P. Morgan Private Bank.
While gold, a safe-haven favourite, pared some gains, it was last up 1.2 percent, at around its highest since mid-June.
The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, ended at a session low of 11.11 after rising as high as 12.63.
At the close trading in NY, the Dow Jones Industrial Average was down 204.69 points, or 0.9%, to 21,844.01, its biggest one-day fall since May 17. On the Nasdaq, 1,846 issues fell and 953 advanced favouring decliners.
The Nasdaq Composite was down 115.35 points, or 1.82 per cent, at 6,236.98.
Foreign investors offloaded shares worth more than 648 billion won (US$566 million), while institutions scooped up more than 678 billion won.
Retailers Wal-Mart (WMT), Home Depot (HD), Target (TGT), Staples (SPLS), and Gap (GPS) are also among the companies due to report their quarterly results next week.
Biotechnology, tobacco, and transportation stocks also saw considerable strength, while steel stocks extended a recent move to the downside.
Shares of staffing firm Adecco slumped 6.4 per cent after its results.
The local currency closed at 1,143.50 won against the USA dollar, down 1.50 won from the previous session's close.
"The yen is the big story really".
The New York stock Exchange showed Friday, a slight resurgence of optimism even if the situation is diplomatic does not improve much between the two countries. China's Tencent Holdings, whose surge in 2017 was key to the Hang Seng's gains, fell 4.9% Friday.
In other news, United States wholesale inflation dropped in July, the first contraction in almost a year and another data point that could weaken the case for the Federal Reserve to raise the benchmark interest rate again later this year.
U.S. Treasury long-dated yields dropped to six-week lows, pressured by U.S. The slide deepened after Trump's remarks on North Korea aired. Brent crude, used to price worldwide oils, gained 56 cents to $52.70 in London.
About 7.5 billion shares changed hands on USA exchanges, well above the 6.25 billion average for the last 20 days. Silver gained 20 cents, or 1.2 percent, to $17.07 an ounce.
"For now, the uptrend is very much intact in gold, reacting to external geopolitical events", said Jonathan Butler, commodities analyst at Mitsubishi in London.