London close: Geopolitical tensions and ex-div stocks weigh on FTSE

U.S. stock indexes opened higher for the first time in four days on Friday after tepid data pointed to benign inflation that could make the Federal Reserve cautious about raising rates again this year, even as concerns lingered over rising tensions between the United States and North Korea.

Traders reacted with dismay to his fresh warning Thursday that his earlier threat to unleash "fire and fury" on the reclusive nuclear-armed state may not have been "tough enough".

Gold hit a two-month high of US$1,278 an ounce amid the nervousness.

At 12:43 p.m. ET (1643 GMT), the Dow Jones Industrial Average was up 49.69 points, or 0.23 percent, at 21,893.7 and the S&P 500 was up 6.84 points, or 0.28 percent, at 2,445.05.

Concern over simmering geopolitical tensions sent Europe's stock markets down for a third day after President Trump stepped up his war of words with North Korea but by late afternoon opportunistic buyers had begun to return on Wall Street.

"When you have a market like we have had this year, and it has been amazingly calm, and you introduce a major source of uncertainty, there is bound to be some reaction", said Brad McMillan, chief investment officer for Commonwealth Financial.

"Absent actual military action, I think the markets will realize that the rhetoric got head of the actual policy and it is time to calm down a little bit", McMillan said.

The Vix, a measure of how much volatility investors expect in stocks, jumped 34.8 per cent, the biggest increase since May.

More news: Conte admits Chelsea 'lost their heads', refuses to comment on ref

Retail results are also on investors' mind as the second-quarter earning season winds down. The S&P 500 added 3.11 points, or 0.1%, to 2441.32, ending the week down 1.4%, its biggest loss since March.

On the US economic front, a report released by the Labor Department showed a modest uptick in consumer prices in the the month of July.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) 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. Financials fell the most, down about 1 percent.

The consumer price data, which pointed to weak inflation, could cause the Federal Reserve to hold off from raising rates again this year.

JC Penney slumped 16.56% to a record low after the retailer reported a bigger-than-expected quarterly loss.

Perrigo surged 17.6 percent after the drugmaker raised its full-year adjusted profit forecast.

Advancing issues outnumbered decliners on the NYSE by 1,432 to 1,310. On the Nasdaq, 1 378 issues rose and 892 fell.

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