By Georgi Kantchev 

U.S. government yields fell and stocks bounced around the flatline Friday following fresh threats from North Korea.

It marked a shift from earlier in the week when U.S. financial stocks followed 10-Year Treasury yields higher, helping lift major indexes to new records.

The Dow Jones Industrial Average shed a fraction of a point to 22359 in recent trading.

The S&P 500 slipped less than 0.1%, while the Nasdaq Composite added less than 0.1%.

Assets perceived as offering more safety than stocks got a boost following the North Korean threats. The Japanese yen and the Swiss franc both advanced against the dollar, by 0.4% and 0.2%, respectively, and gold rose 0.3%. On Friday, 10-year Treasury yields were down at 2.254%, from 2.278% on Thursday, with yields moving inversely to prices.

Still, U.S. government bond yields remained slightly higher from a week ago. Yields climbed after the Federal Reserve suggested Wednesday that it was open to the possibility of an interest-rate increase in December. The rise in yields helped lift bank stocks, which can profit from rising interest rates. Financial stocks in the S&P 500 are set to finish the week up 2.3%, though on Friday they slipped 0.4%.

Weak inflation numbers in recent months had made some investors skeptical the Fed would raise rates again in 2017. But after the Fed meeting Wednesday, investors now see a 75% chance of a rate rise by the end of the year, according to Fed-fund futures tracked by CME Group.

The Stoxx Europe 600 index rose 0.1% after falling in earlier trading, while bourses across Asia finished mostly in the red.

North Korean Foreign Minister Ri Yong Ho said late Thursday in New York that the country may consider a nuclear test of "unprecedented scale" in the Pacific Ocean.

Those comments came after North Korean leader Kim Jong Un said he was considering the "highest level of hard-line countermeasure" in response to President Donald Trump's warning that the U.S. would annihilate North Korea if forced to defend itself or its allies.

This was likely causing investors to be "antsy heading into the weekend, " said Emmanuel Ng, an analyst at OCBC Bank.

The British pound was down 0.1% against the dollar at $1.356 as investors watched a key speech on Brexit by U.K. Prime Minister Theresa May on Friday. Sterling had strengthened earlier this month after the Bank of England signaled it might raise interest rates as soon as November.

On Sunday, Germany votes in federal elections. Polls suggest that Chancellor Angela Merkel's Christian Democratic Union party is likely to win enough votes to give her a fourth term.

In Japan, gains in the yen hurt the Nikkei Stock Average, which closed down 0.3%. A stronger currency would hurt the country's key export stocks. Hong Kong's Hang Seng fell 0.8%, while in South Korea the Kospi fell 0.7%.

Lucy Craymer contributed to this article.

Write to Georgi Kantchev at georgi.kantchev@wsj.com

(END) Dow Jones Newswires

September 22, 2017 10:36 ET (14:36 GMT)

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