France's CAC-40 was down 55.08 points, or 1.6 percent, at 3,352.74, while Germany's DAX was 6.75 points, or 0.1 percent, lower at 4,862.55.
Earlier Tokyo's Nikkei 225 index sank 5 percent to 8,576.98 amid persistent worries about earnings. Investor sold shares after the previous day's 10 percent surge and ahead of a three-day weekend in Japan. They didn't react much to the Bank of Japan's rate cut, which was widely expected, even if it was a bit less than the typical quarter-point move.
Concerns about the global economy were stoked Thursday by the news that U.S. consumers reined in spending in the July-September quarter by their biggest amount since 1980, contributing to the 0.3 percent contraction in the overall economy.
Export-dependent countries like Japan will likely be hit hard by the consumer retrenchment in the U.S.
"It is perhaps no surprise that some Asian equity markets did not follow the gains registered in U.S. stocks overnight, with Asian equity markets set to post their worse month on record," said Mitul Kotecha, an analyst at Calyon.
Trading could well be volatile Friday because it is the end of the month and many traders may be looking to square up positions accumulated over the last few volatile weeks.
"The risk of some end of week-month profit taking may see a more cautious approach pick up as the session progresses," said Matt Buckland, a dealer at CMC Markets.
Wall Street looked to lock in some of its gains from the week Friday as investors awaited data on personal spending as well as details on a possible government plan to help struggling U.S. homeowners.
Dow Jones industrial average futures fell 124, or 1.3 percent, to 9,102, while Standard & Poor's 500 index futures fell 14, or 1.5 percent, to 947.50.
Earlier, South Korea's market extended the previous session's 12 percent rally with the Korea Composite Stock Price Index gaining 2.6 percent to 1,113.06. Australia's key index climbed out of negative territory to close 0.4 percent higher.
But Hong Kong's Hang Seng slid 2.5 percent to 13,968.67 after vaulting 12.8 percent Thursday. Smaller Asian markets such as the Philippines and Taiwan both rose 4 percent or more, while Jakarta's main index shot up 7 percent.
In India, the benchmark Sensex index surged nearly 7 percent as traders caught up with Thursday's rally in Asian markets, when investors cheered a U.S. Federal Reserve rate cut and further central bank steps to boost dollar liquidity in emerging markets.
Japan's rate cut by 0.2 percentage point to 0.3 percent comes as nations around the world seek to cushion their economies from the unfolding financial crisis. On Wednesday, the U.S. Federal Reserve slashed its key rate by half a percentage point to 1 percent, a level seen only once before in the last half century. Earlier this week, South Korea's central bank lowered rates by three-quarters of a point - its biggest cut ever - to 4.25 percent. China, Hong Kong and Taiwan also reduced rates this week.
The Bank of Japan's policy board was split 4-4, so Gov. Masaaki Shirakawa, who has the final say in the event of a tie, voted in favor of the cut.
The central bank warned that "adjustments in the world economy stemming from financial crises in the United States and Europe have further increased in severity."
Oil fell below $64 a barrel with light, sweet crude for December delivery down $2.05 at $63.91 a barrel.
In currencies, the dollar fell 1.1 percent to 97.49 yen, while the euro dropped 1.4 percent to $1.2755.
AP Business Writer Stephen Wright in Bangkok and AP writer Mari Yamaguchi in Tokyo contributed to this report.