* 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
Microsoft Corp
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.
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
The sliding dollar helped gold
"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