Gold holds gains in Asia with North Korea tension setting the tone

Pope Francis celebrated Mass in Seoul's Myeongdong Cathedral

They outweighed gains in health care stocks and elsewhere.

Energy stocks also fell along with the price of crude oil.

"Right now the market is viewing it as a lot of saber-rattling and a lot of smoke, but not much fire", said Darrell Cronk, president of Wells Fargo Investment Institute.

The dollar index was trading 0.2 percent up at 93.73. Eastern time. The Dow Jones industrial average slid 105 points, or 0.5 percent, to 21,943. Earlier, the average had been down more than 88 points.

The Nasdaq composite lost 13.31 points, or 0.2 percent, to 6,370.46.

The broader Topix dropped 0.2 percent to 1,615.56.

Geopolitical concerns continued to weigh on Wall Street amid an ongoing escalation in tensions between the US and North Korea.

Just hours before North Korea's warning, US President Donald Trump warned Pyongyang that if it continued to threaten Washington, the Communist nation would face "fire and fury" the world has never seen. The comments follow reports that the North has mastered a technology needed to strike the United States with a nuclear missile.

Investors instead turned to safe-haven assets such as gold, pushing it to a two-month high, and the Japanese yen rose. But the moves were modest. Spot gold was 0.1 percent lower at $1,276.78 an ounce after having spiked the previous day to a near two-month peak of $1,278.66.

While the tough talk about the potential for war is scary, investors have heard it many times before.

Wall Street got off to a downbeat start early Thursday as tensions between the USA and North Korea continued to escalate, rattling markets overseas.

Travel website operator Priceline Group Inc fell 6.9 per cent after a disappointing financial forecast.

In Europe, Germany's DAX fell 1.1 percent, while the CAC 40 in France lost 0.6 percent.

Macy's shares closed down 10.2 percent and Kohl's fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off. Natural gas jumped 10 cents, or 3.5 percent, to $2.99 per 1,000 cubic feet. The declines in some Asian bourses, like Japan's Nikkei, was limited after Wall Street shares closed barely lower overnight, trimming losses, as investors appeared to brush off geopolitical concerns. The stock fell 85 cents to $12.76. The Russell 2000 index gave up 24.40 points, or 1.7 percent, to 1,372.54. Copper rose 4 cents to $2.94 a pound. The euro edged down to $1.1727 from $1.1751. Britain's FTSE 100 sank 1.4 percent. The NYSE Arca Biotechnology Index plunged by 3.4 percent to its lowest closing level in well over a month.

A spike missile is fired in this file photo provided by South Korea's Marine Corps Command. Hong Kong's Hang Seng was off 0.3 percent. US crude CLc1 shed 10 cents to $49.07 a barrel. Oil prices were headed higher. Gold prices increased 1% and the Swiss franc gained against all major currencies.