World shares dropped following concerns that the two-day meeting of EU leaders, expected this week, will have very little impact on the debt crisis.

The late trading in the afternoon in New York appeared to weaken after the Standard and Poor’s 500 indicator dropped by 1.71 percent. The Dow Jones indicator of the industrial average declined by 1.27 percent, while Nasdaq Composite indicator weakened by 2.00 percent.

According to the latest reports from Bloomberg News, the European market, the Stoxx 600 indicator closed by indicating a loss of about 1.5 percent on a couple of the previous trading sessions. That wiped out its last gain for the year.

Among the greatest issues of concern about European market outlook were an additional decline in oils prices plus the latest action of the bond yields especially those on US treasuries. Although these treasuries were deemed a safe-haven, they have maintained a drop while the ones on Spain and Italy indicate a continuous increase.

According to a recent report from Bloomberg, the 10-year US note yield dropped 7 basis points to about 1.61 percent. This forced the bonds to record the greatest intraday decline since June 15^th.

Mandy Xu, a strategist in equity derivatives at Credit Suisse, NYC told the Reuters that the dropping oil prices plus the declining bond yields show global growth, while increased autonomous credit spreads along with a strong US dollar imply that the current European disaster won’t be solved anytime soon.

Spain’s two-year bond yields increased 39 basis points to around 4.83 percent. This largely attributed to the request issued by the state to the EU for more aid. It had requested for more than 100 billion euros for its banks.

Germany’s Chancellor, Angela Merkel, still insists that some of the problems facing the Euro Zone can be solved through Euro Zone bonds.

Merkel was reported by Bloomberg as saying that it is not a brave prediction to claim that most people in Brussels will be focusing on Germany once again. She added that she expects the forth coming meeting to focus more on ideas for a joint liability and pay less attention to improved mistakes and structural measures.

Today, the euro showed a weakening trend after it dropped by 0.7 percent against the US dollar. The news that the Greek’s finance minister had resigned a few days after taking over the job did not have any positive impact on the currency. The euro didn’t fare so well today either, weakening 0.7 per cent to US$1.2483.

Accusing Merkel of misleading Europe, billionaire George Soros told Bloomberg that the EU officials have only three days to solve their differences.

Credible sources also told Reuters that the worsening situations in Europe are evidently taking its toll. They added that the credit Suisse is expected to layoff some of its senior officials in its European investment banking department by a third. This is mainly due to the stiffer regulations and weakening market.

Another source said that the European investment banking business is expected to layoff 60 directors and managing directors.