GLOBAL MARKETS-Shares fall, dollar gains after Fed decision

* Fed seen slightly less dovish than expected

* World equities markets fall after hitting highest in almost six years

* Gold, euro dip

By Rodrigo Campos

NEW YORK, Oct 30 (Reuters) - Recent market trends reversed on Wednesday after a slightly less-dovish-than-expected statement from the Federal Reserve, with stocks and Treasury prices turning lower while the U.S. dollar showed strength.

The Fed extended its support for a slowing U.S. economy, saying it will keep buying $85 billion in bonds per month for the time being.

However the U.S. central bank dropped a reference to a "tightening of financial conditions observed in recent months" from its list of risks to the outlook.

Analysts had warned that any hint that the Fed could trim its stimulus in the near future could prompt a negative market reaction. They noted that the recent rally had stretched valuations to a point that could encourage some profit-taking.

"Brace yourself for a December taper," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

"The Fed was dismissive about how higher mortgage rates are affecting the housing recovery. They also removed the statement about their concerns regarding a deterioration in financial conditions. This sets the stage for an easy start to taper in December."

The Dow Jones industrial average fell 57.73 points, or 0.37 percent, at 15,622.62. The Standard & Poor's 500 Index was down 8.35 points, or 0.47 percent, at 1,763.60. The Nasdaq Composite Index was down 21.72 points, or 0.55 percent, at 3,930.62.

The MSCI world equity index hit an intraday level not seen since January 2008 before slipping in afternoon trade after the Fed statement. European shares were flat.

DOLLAR UP, GOLD TURNS LOWER

The U.S. dollar erased its losses against the euro and rose against the yen as market participants focused on the details of the Fed Statement.

"The fact that the Fed took out the statement on financial market tightness to me seems quasi-hawkish. The Fed is essentially hinting at the fact that they may taper sooner rather than later," said Boris Schlossberg, managing director at BK Asset Management in New York.

"Before the market was expecting tapering in March and now it could very well be December. The dollar is gaining as a result of this."

The dollar index rose 0.2 percent a day after posting its largest advance in more than three weeks.

Dollar sellers had driven the U.S. currency to nine-month lows by the end of last week, taking their lead from a steady decline in U.S. Treasury yields as investors anticipated and extended the period of Fed bond buying.

The Fed statement, however, turned the tables on bonds.

The 10-year Treasury note last traded down 6/32 in price to yield 2.527 percent, after earlier hitting 2.473, near a three-month low of 2.471 percent hit last week.

The euro fell 0.1 percent to $1.3730 after dropping the most in three weeks on Tuesday.

Spot gold turned slightly lower after earlier rising the most in a week. Gold was last down 0.1 percent to $1,342.14 an ounce.

Brent crude settled up 0.8 percent at $109.86 a barrel as export disruptions in Libya continue to cut supplies to Europe and Asia, while the benchmark U.S. contract fell 1.5 percent to $96.77 a barrel after a bigger-than-expected increase in inventories in the United States.