Stock index futures pointed to a lower open on Wall Street on Friday, adding to the two-week slump as investors continued to sell, spooked by the prospect of another recession.

At 0900 GMT, futures for the S&P 500 down 0.48 percent, Dow Jones futures down 0.7 percent and Nasdaq 100 futures down 0.35 percent.

Investors braced for the all-important U.S. monthly non-farm payrolls as well as the unemployment rate, due at 1230 GMT on Friday, seeking more insight on the extent of the damage in the labor market following a string of bleak macroeconomic data.

Economists see payrolls up by 85,000, according to a Reuters survey, after a tepid 18,000 gain in June. The unemployment rate is expected to hold steady at 9.2 percent.

Japan's Nikkei average dropped 3.7 percent while European stock indexes shed 2 percent in morning trade on Friday, heading toward a weekly loss of more than 10 percent.

"The reality of a global economic contraction seems to have finally kicked in as the markets continue to plummet across Europe," ETX Capital senior trader Manoj Ladwa said.

"Investors are pricing in a slowdown in growth and sovereign debt problems as equities drop across the board. While U.S. payroll and employment numbers later today are likely to come in weak, the market does seem to have factored this in, and could recover some of its losses later in the session."

Italian 10-year government bond yields climbed above their Spanish equivalent while the cost of insuring the country' debt against default climbed on Friday, as Italy was hammered by market concerns that the contagion of the euro zone's debt crisis could not be contained.

The Dow and the S&P 500 tumbled more than 4 percent on Thursday and the Nasdaq lost 5 percent.

China and Japan called for global cooperation on Friday after a financial market rout signaled fear that Europe's debt crisis could spin out of control and the U.S. economy may slide into another recession.

U.S. crude fell below $83 on Friday, heading for its biggest weekly drop since early May, as fears of a global economic slowdown prompted investors to run for the exits.

Bailed-out insurer American International Group will be in focus after reporting a profit for the second quarter on Thursday, as tax benefits and its one-third stake in Asian insurer AIA offset a decline in operating income at its main businesses.

Bank of America Corp will also be in the spotlight as the bank's legal losses could cost as much as $2.3 billion above money already set aside to cover litigation, the largest U.S. bank by assets said in a securities filing.