Where are Antonio and his friends, and what does Antonio say about his sadness in the opening scene of The Merchant of Venice?

Antonio and his friends are on a street in Venice, a city of "psychic, dark corners," as Shakespearean critic Harold Bloom describes it. Antonio has fallen into one of these "dark corners" in his mind, and his friends Salerio and Salanio express their concern. 
When Antonio tells the two men that he knows no cause for his sadness--"In sooth I know not why I am so sad (1.1.1.)--Salerio suggests that Antonio may be anxious about his merchant ships: "Your mind is tossing on the ocean" (1.1.8). However, Antonio denies that this is the cause. Not convinced by Antonio's reply, Salanio provides Antonio with another opportunity to admit his concerns as by observing that he would certainly be worried about everything that could go wrong were he in Antonio's place. Nonetheless, Antonio is adamant that nothing about his business disturbs him.
When Salanio suggests that he might, then, be in love, Antonio replies heatedly, "Fie! fie!" At this, Salerio cleverly amends Salanio's question in order to ameliorate the situation:

Not in love? Then let us say you are sad,Because you are not merry: and 'twere as easyFor you to laugh and leap and say you are merry,Because you are not sad. (1.1.49-52)

At this point, Bassanio, Lorenzo, and Gratiano enter and Salerio and Salanio make their departure, bowing to "worthier friends."
Perhaps, then, the very beginning of this play is meant to set a tone that complements the sometimes incongruous, foreboding, and "psychic" city of Venice, as well as to foreshadow the misfortune of Antonio which is to come.