By Caroline Valetkevitch
NEW YORK (Reuters) - Equity markets around the world fell while the euro slid to a five-week low against the dollar on Tuesday amid concerns over Greece's future as euro zone leaders were set to meet for an emergency summit on the country's debt crisis.
Oil prices fell, extending losses after their biggest selloff in five months on Monday.
Greek Prime Minister Alexis Tsipras had a final chance to present credible reform proposals to the summit to persuade creditors to reopen aid talks before his country's banks run out of money.
Failure to reach a deal would make it more likely Greece will drop out of the euro.
"Markets seem to be losing patience and faith in the Athens' debt crisis ending with Greece's banks intact and the country still a member of the euro zone," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
MSCI's all-country equities world index lost 0.9 percent.
The Dow Jones industrial average fell 104.46 points, or 0.59 percent, to 17,579.12, the S&P 500 lost 11.66 points, or 0.56 percent, to 2,057.1 and the Nasdaq Composite dropped 47.81 points, or 0.96 percent, to 4,944.13.
European shares were down 1.3 percent.
BOND YIELDS FALL
German 10-year bond yields fell to their lowest since early June. That helped push the euro down.
The euro dropped 1.2 percent to $1.0925 against the dollar, after sliding to a five-week low of $1.0917, while the dollar index rose 0.9 percent to 97.154, after earlier hitting a one-month high.
The European Central Bank raised on Monday the discount it charges on collateral that Greek banks must offer in exchange for funds. Sources said the move was largely symbolic, since the amount Greek banks can borrow is capped.
The U.S. benchmark 10-year bond yield touched a session low of 2.194 percent.
Many asset managers believe a Greek exit from the euro can still be avoided. Others say the ECB will step in to limit any contagion.
OIL EXTENDS MONDAY'S FALL
Brent crude was down 98 cents at $55.56 while front-month U.S. crude was down $1.39 at $51.14.
Earlier, Asian shares drooped after further losses in China.
China's CSI 300 index of the biggest listed companies in Shanghai and Shenzhen closed down 1.8 percent. It had fallen more than 5 percent earlier in the day.
(Additional reporting by Gertrude Chavez-Dreyfuss in New York; Nigel Stephenson, John Geddie, Anirban Nag, Alistair Smout and Christopher Johnson in London, Hideyuki Sano in Tokyo; Editing by Meredith Mazzilli)