Another sickly day in Europe has the U.S. stock market ready to open more than 1% lower Friday, and even Treasury yields are backing up a bit.

"European equities, extending steep losses, are lower across the board," said economists at BMO Capital Markets. They noted growing concerns that European banks are facing short-term funding pressure and pointed to the FTSE (-2.5%), the CAC-40 (-2.7%), and the DAX (-3.5%).

"Note that this latest stock market rout is happening despite the short-selling ban that was put in place by France, Italy, Spain and Belgium last week," they said.

Often these concerns lead to cash flooding the Treasury market. But not today, or at least not yet, perhaps because yields are already so low.

The Treasury's 10-year yield is three basis points up at 2.10% and the 30-year yield is one basis point higher at 3.44%. The two-year yield is steady at 0.20%. The Fannie Mae 4.0 MBS coupon is -9/32 at 104-08 and the Fannie Mae 3.5 is -15/32 at 101-09

S&P 500 futures are 15.1 points lower (-1.32%) at 1,128.40 and Dow futures are 162 points lower (-1.47%) at 10,855. The two indexes plummeted 4.46% and 3.68% on Thursday.

Asian markets were all swimming in the red. Japan's Nikkei 225 fell 2.51%, Hong Kong's Hang Seng fell 3.08%, and China's Shanghai index shed 0.95%. 

Meantime, light crude oil is nearing the $80 mark. It stumbled 1.86% overnight to $80.93 per barrel - this time yesterday it was at $86. Gold prices continued their trajectory towards unprecedented levels, rising 2.46% overnight to $1,866.80.

Key Events Today

1:45 - Sandra Pianalto, president of the Cleveland Fed, speaks on "The Evolving Financial Services Industry and the Outlook for U.S. Economic Growth."