* U.S. pending home sales slump in September
* Fed meeting could fuel more dollar selling
* Brent climbs as Libya output drops
NEW YORK, Oct 28 (Reuters) - An index of world shares ticked up and neared a six-year high while the U.S. dollar edged higher on Monday but stayed close to a nine-month low as expectations lingered that the Federal Reserve will keep its loose monetary policy in place this week.
The Federal Open Market Committee, the Fed's policy-making arm, is unlikely to make any shift to policy at its meeting on Tuesday and Wednesday as the Fed awaits more evidence of how badly Washington's recent budget battle hurt the U.S. economy.
Most riskier assets rose sharply last week as the uncertainty caused by the U.S. government shutdown and a mixed batch of economic data convinced many the Fed would delay any move to begin trimming its stimulus into next year.
With the dollar trading near its lowest levels of the year against most major currencies, however, and the euro near a two-year high and many major global share indexes near record highs, investors were wary of pushing prices higher.
"It may turn out that a neutral FOMC is a green light to keep selling the dollar until November headline data begin appearing in early December, but there is already a lot of dovishness priced in," said Steven Englander, global head of foreign exchange strategy at CitiFX, a division of Citigroup in New York.
The dollar index was up 0.2 percent at 79.35, not far from a near nine-month low of 78.998 touched on Friday. The euro dipped to $1.3782, having touched a high of $1.3833 late last week.
The longer the Fed keeps its policy loose, the longer U.S. yields will stay low, making the dollar less attractive.
U.S. stocks were little changed with the S&P 500 near the record set on Friday as traders awaited earnings from Apple due after the closing bell.
"In order for the ball to keep rolling on Wall Street, we'll need to know that the Fed's stimulus will stay in place, giving us abundant liquidity," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
"In the meantime, we've gone something like 500 days without a 10 percent correction, and at some point earnings will have to catch up with current valuations."
The Dow Jones industrial average fell 22.61 points or 0.15 percent, to 15,547.67, the S&P 500 lost 1.06 points or 0.06 percent, to 1,758.71 and the Nasdaq Composite dropped 13.722 points or 0.35 percent, to 3,929.639.
MSCI's world equity index, which tracks share moves in 45 countries, was up 0.2 percent marking a fourth day of gains as it climbed back towards last week's peak, last seen in January 2008.
After opening in line with Asian markets' gains, Europe's main indexes had turned lower by midday, reflecting a more mixed set of corporate earnings announcements and the caution over the recent run up.
The broad FTSEurofirst 300 index was down 0.2 percent as it shed some of last week's 0.6 percent gain which had taken the index to a five-year high.
MOST MARKETS ON FED WATCH
The likelihood that Fed cash will keep flowing into the financial system for longer than many had anticipated supported gold and other metal markets, but after strong gains last week these markets were also wary of pushing much higher.
Spot gold was up 0.2 percent at $1,354.2 an ounce, after hitting a five-week high of $1,356.5. Copper was also up 0.2 percent at $7,199 a ton.
In the oil market, Brent crude rose above $108 a barrel after a new drop in Libya's oil exports revived supply concerns, while strong gains in U.S. industrial output boosted demand hopes.
Brent rose 1.8 percent to $108.90 a barrel and U.S. crude added 0.2 percent to $98.08 a barrel.
U.S. Treasuries prices were little changed as investors prepared to make room for this week's $96 billion in longer-dated government debt supply but a weak reading in U.S. pending home sales data gave prices support.
Benchmark 10-year Treasury notes traded down 1/32 in price with a yield of 2.507 percent. The 10-year yield touched a three-month low of 2.471 percent last week in the wake of disappointing September jobs figures.