Updated from 4:11 p.m. ESTSelling pressures were exacerbated by thin trading and stocks fell Friday, as heightened tensions on the Korean peninsula overshadowed a fairly bullish report on new home sales. The Dow Jones Industrial Average finished down 129 points, or 1.5%, to 8304, while the Nasdaq fell 20 points, or 1.4%, to 1348. The S&P 500 dropped 14 points, or 1.6%, to 875. Volume was extremely light, with 751 million shares changing hands on the NYSE and 686 million on the Nasdaq. Declining stocks outpaced advancers by a 2-to-1 margin on both exchanges. "Problems overseas put pressure on the market," said David Memmott, head of listed trading at Morgan Stanley. "But it was extremely quiet. So, it was not too hard to move the market around." Within individual sectors, networkers, financials, cyclicals, drugs, semiconductors, and airlines were among the weakest performers of the day. On the Dow, AT&T ( T) was the only stock to finish the session higher. Overseas, markets ended mostly lower, with London's FTSE 100 losing 2.9% to 3829 and Germany's Xetra DAX plunging 4% to 2884. In Asia, Japan's Nikkei rose 0.2% to 8714, while Hong Kong's Hang Seng fell 1.2% to 9445. North Korea said Friday it would expel the remaining U.N. nuclear inspectors, citing its decision to "unfreeze" its nuclear facilities. The Seoul news agency Yonhap quoted a letter from the North Korean government saying the inspectors "have no reason to remain in our country." The move is the latest escalation of regional tensions that began when the U.S. cut off oil shipments to the North following allegations it had been secretly pursuing a nuclear weapons program. "The market was discounting all of the news coming out today," said James Park, senior vice president of trading at Brean Murray Foster. "But the selloff happened on very low volume." The tensions in North Korea, in addition to news of a suicide bombing in Chechnya and fighting in Israel, were pressuring the dollar, which is currently hovering at a three-year low against the euro. Meanwhile the price of crude oil remained above $30 a barrel on concerns that Venezuela will be unable to resolve labor strife that has reduced crude output to a fraction of normal. While the head of the state-run oil company is pledging to restore production in a month, traders continue to bid up crude in London, tacking another 78 cents on the price of a barrel to a two-year high of $30.39. Despite the recent spike, Unocal ( UCL) said it overestimated the price of crude oil in the fourth quarter, and as a result its earnings will trail previous guidance. Unocal expects to earn 30 cents to 40 cents a share on an adjusted basis in the period, down from prior estimates of 50 to 60 cents a share. In addition to the lower-than-expected oil price, the company cited increased expenses related to its purchase of Pure Resources in October. The shares fell 4.8% to $30.12. Stocks didn't get much of a boost from a report showing sales of new single-family homes rose 5.7% last month to a 1.069 million annual rate. The increase topped economists' forecasts. The corporate news flow remained slow following Christmas. Lockheed Martin ( LMT) reportedly received a $3.5 billion contract to provide fighter jets to Poland. A federal appeals court dismissed a suit brought by Pepsico ( PEP) against Coca-Cola ( KO) over access to fountain drinks. Pfizer ( PFE) said it won approval for an experimental treatment for migraine headaches. The stock lost 0.8% at $29.79, however. Treasuries were stronger, with the 10-year note finishing up 24/32 to yield 3.8%.