NEW YORK (Reuters) - World equities faltered on Wednesday, pulled down by a fall in U.S. technology stocks and resurgent skittishness after Swiss measures to halt the franc's rise frustrated investors seeking harsher steps.
The turn in sentiment was marked by a sharp reversal in the U.S. Treasury market, where prices for the benchmark 10-year note shot up, pushing its yield down to 2.17 percent. Gold pared early gains but signs of rising inflation and a lack of solution to the euro zone debt crisis underpinned bullion.
The U.S. dollar, meanwhile, dropped across the board, hurt by sharp losses versus the franc, which strengthened even after the Swiss National Bank announced a series of measures to halt the currency's steady appreciation.
The plight of the franc was part of a larger battle over Europe's fiscal crisis, with the Swiss currency a beneficiary of investors seeking safety in a currency other than the euro.
"You're pitting an economy with less than 8 million people (Switzerland) against the euro zone, with a population of 338 million," said Greg Anderson, senior currency strategist at CitiFX, a division of Citigroup, in New York.
"If euro zone investors want to buy the Swiss franc because they don't feel safe, there's nothing the Swiss can do about it," he said.
The euro tumbled more than 2 percent against the franc in volatile trade to hit a low of 1.12248 francs, and was last at 1.1392 francs, down 0.7 percent.
The dollar fell against a basket of major currencies, with the U.S. Dollar Index off 0.38 percent at 73.732.
U.S. stocks turned south at midday but later pared some losses. Shares of Dell Inc slumped 10 percent, a day after the world's second-largest PC maker slashed its full-year revenue forecast, citing weak technology spending.
The Dow Jones industrial average closed up 4.28 points, or 0.04 percent, at 11,410.21. The Standard & Poor's 500 Index was up 1.12 points, or 0.09 percent, at 1,193.88. The Nasdaq Composite Index was down 11.97 points, or 0.47 percent, at 2,511.48.
Benchmark 10-year Treasury notes rose 18/32 in price, their yields falling to 2.17 percent. Thirty-year bonds rose more than 2 points, their yield falling to 3.56 percent from 3.67 percent on Tuesday.
Global stocks, as measured by MSCI's all-country world equity index, gained 0.35 percent.
The sharp turn in markets came after European equities closed at their highest level in more than a week as investors trained their sights on company earnings and attractive equity valuations following a dismal opening. A Franco-German meeting on Tuesday failed to appease investors.
"Volatility remains the fundamental theme of the markets at the moment. But there is still a lot to be positive about, given where valuations are and as balance sheets look very healthy and companies are awash with cash," said Henk Potts, equity strategist at Barclays Wealth.
Oil jumped above $111 a barrel, the highest in almost two weeks, on a larger-than-expected decline in U.S. gasoline supplies.
The market later pared gains when the U.S. Energy Information Administration confirmed the gasoline drawdown but also reported a steep build in crude stockpiles.
ICE Brent for October delivery settled up $1.47 at $110.60 a barrel, while U.S. crude for September delivery closed at $87.58, gaining 93 cents,
Brent's premium against the U.S. October crude contract closed at $22.87.
U.S. gold futures for December delivery settled up $8.80 at $1,793.80 an ounce.