GLOBAL MARKETS-Fed, tech shares push stocks, dollar lower

                                
  
                                
 * US shares drop as Fed commitment underscores weak growth
                                
 * Asia, emerging stocks help MSCI world equity index
                                
 * Dollar hits 5-month low vs euro; gold sets new high
 (Updates to U.S. markets' close)
                                
 By Al Yoon
                                
 NEW YORK, Sept 22 (Reuters) - The dollar fell against other
major currencies and major stock markets declined on Wednesday
as some technology companies slumped and the Federal Reserve's
downbeat assesment of the U.S. economy weighed on sentiment.
                                
 Gold hit a record high on speculation that U.S. government
stimulus would quicken inflation, while the prospect of more
cash flowing through the system boosted stocks and currencies
in developing economies that are outperforming Europe and the
United States.
                                
 The Fed said on Tuesday it stood ready to pump new dollars
into the economy -- a second round of so-called quantitative
easing. The central bank made no policy shift, but investors,
understanding the economic situation was eroding, sold stocks
to book profits built this month, analysts said.
                                
 European and Wall Street shares drifted lower as investors
were torn between expectations for Fed help and its message of
a faltering recovery. They were also uncertain if Fed moves
would be enough to ward off a double-dip recession.
                                
 "Investors are realizing things will have to deteriorate
first in the economy before the Fed is going to intervene,"
said Philippe Gijsels, head of research at BNP Paribas Fortis
Global Markets in Brussels.
                                
 The Dow Jones industrial average <.DJI> dropped 21.72
points, or 0.20 percent, at 10,739.31 and the Standard & Poor's
500 Index <.SPX> fell 5.5 points, or 0.48 percent, to 1,134.28.
The Nasdaq Composite Index <.IXIC> slipped 14.80 points, or
0.63 percent, to 2,334.55.
                                
 Thursday's early trading may be weak. The December futures
contract that trades in Chicago for the Nikkei 225 stock index
<0#NK:> slid 105 points to 9,470.
                                
 A top Nasdaq loser was Adobe Systems Inc <ADBE.O>,which
declined 19 percent to $26.67 after the software maker forecast
lower-than-expected revenues. For details, see [ID:nN21181826]
                                
 Microsoft Corp <MSFT.O> declined 2.2 percent to $24.61 amid
disappointment over the computer software giant's new quarterly
dividend. The company has been under pressure to distribute
more of the $37 billion of cash on its balance
sheet.[ID:nN21191991].
                                
 In Europe, the FTSEurofirst 300 index <.FTEU3> dropped 1.5
percent, while the MSCI world equity index <.MIWD00000PUS> rose
0.1 percent, boosted by Asian and other emerging market shares
as emerging market stocks <.MSCIEF> rose 0.6 percent.
                                
 The Thomson Reuters global stock index <.TRXFLDGLPU>
declined 0.3 percent.
                                
 Investors' major concern in Europe remained the levels of
government debt. Persistent worries about Ireland's fiscal
deficit pushed the spread of its 10-year bond yield over German
Bunds to euro lifetime highs of 4.25 percentage points.
<IE10YT=TWEB>
                                
 Ireland's borrowing costs jumped at a bond auction but
appetite for its bonds as well as Spanish and Greek debt was
enough to lift their bond markets.
                                
 Despite austerity measures in Ireland, investors demanded
higher yields on its bonds because of worries about the cost of
bailing out its banks, and the toll that economic troubles
could take on tax revenues.
                                
 The dollar <.DXY> fell 0.8 percent to a six-month low
against major currencies.
                                
 The euro rose as high as $1.3440 <EUR=>, its strongest
since April, as traders believing in the success of Fed
stimulus took on risk. By the close of trading in New York, the
euro gained 1.1 percent to $1.3391. Against the Japanese yen,
the dollar <JPY=> fell 0.65 percent to 84.54 yen.
                                
 The sliding dollar helped gold <XAU=>, which rose to a
record of $1,296.10 an ounce before easing to $1291.30, a gain
of 0.5 percent. U.S. crude oil <CLc1> reversed gains and fell
0.4 percent to $74.69 a barrel.
                                
 "It looks like the hurdle for (quantitative easing) has
been lowered, and the Fed is more concerned about the inflation
picture," said Nick Stamenkovic, rate strategist at RIA
Capital, who added that the Fed may act as early as November.
                                
 Yields on benchmark U.S. Treasuries fell to their lowest
levels in three weeks as traders extended a rally from Tuesday
when the Fed raised prospects of more quantitative easing. This
easing could be in the form of Treasury bond purchases,
economists said.
                                
 The yield on the benchmark 10-year Treasury note
<US10YT=RR> declined 0.03 percentage point to 2.55 percent.
 (Additional reporting by Joanne Frearson and Amanda Cooper in
London, Carmel Crimmins in Dublin and Vivianne Rodrigues in New
York; Editing by Kenneth Barry)