US stocks fell on overnight amid news that a South Korean navy ship with 104 people aboard sank in waters near the North Korean border.
The Dow Jones Industrial Average dropped 15.79 points (0.15 per cent) at 10,825.42, a day after the market suffered a late sell-off due to eurozone debt jitters.
The tech-rich Nasdaq composite slipped 11.52 points (0.48 per cent) to 2,385.89 while the broad-market Standard & Poor's 500 index declined 3.63 points (0.31 per cent) to 1,162.10.
The market jumped in early trading following a European agreement to aid debt-laden Greece, but investors began locking in profits amid reports said a South Korean navy ship sank near the North Korean border on Friday because of an unexplained explosion in its stern.
South Korea's government has called an emergency security meeting but a presidential spokeswoman said it was still unclear whether the sinking resulted from a clash with North Korea.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
"Headlines on escalating geopolitical tensions around South and North Korea have been circulating, and are most likely contributing to some risk-paring ahead of the weekend, but there doesn't appear to be one single catalyst that triggered the quick pullback in stocks," analysts at Briefing.com said.
Wall Street earlier appeared to breathe a sigh of relief after stocks pulled back on Thursday from 18-month highs as political infighting in Europe pressured the euro to 10-month lows against the dollar.
"It appears then that Greece is going to be spared the sword for now and that is helping to provide a stabilising influence after yesterday's late slide," said analyst Patrick O'Hare of Briefing.com.
A government revision of US economic growth for the final quarter of last year to 5.6 per cent from an earlier estimate of 5.9 per cent had a minimal impact on trading, analysts said.
The slower growth stemmed from downward revisions to business investment, inventories, and consumer spending, the commerce department said.
Analysts had expected the world's largest economy to grow at 5.9 per cent in the final quarter from 2.2 per cent in the third quarter.
Euro stocks close downNashville gas prices drop, but decline is not expected to last long
