The Federal Reserve calmed global stock markets Tuesday by unveiling a dramatic new weapon that would allow it to buy short-term commercial paper, providing a “liquidity backstop” for corporate issuers.

In early morning trading, the Dow Jones Industrial Average edged 21 points, or .2 percent, to 9,976, while the Nasdaq remained in negative territory, down 13.3 points, or .7 percent, to 1,849.

In a statement, the Fed, led by Chairman Ben Bernanke, said it was creating the Commercial Paper Funding Facility to enhance liquidity by buying three-month unsecured and asset-backed commercial paper directly from issuers. The move is designed to unclog the market and enhance investors’ confidence.

Commercial paper is commonly bought by money market mutual funds and pension funds. Money market funds, some of which dabbled in debt from financial companies like bankrupt Lehman Brothers have themselves been under pressure. Reserve Management Corp., founded by the originator of the money market fund, recently told investors that one of its funds would be unable to return investors’ capital in full.

“The commercial paper market has been under considerable strain in recent weeks as money market mutual funds and other investors, themselves often facing liquidity pressures, have become increasingly reluctant to purchase commercial paper, especially at longer-dated maturities,” the Fed statement said. “By eliminating much of the risk that eligible issuers will not be able to repay investors by rolling over their maturing commercial paper obligations, this facility should encourage investors to once again engage in term lending in the commercial paper market. Added investor demand should lower commercial paper rates from their current elevated levels and foster issuance of longer-term commercial paper.”

The Fed did not specify how much capital it would use to acquire commercial paper.

In high technology issues, The Morgan Stanley High Technology Index slid 4.3 points to 407.1 and the Philadelphia Semiconductor Sector Index edged up .4 to 274 after Advanced Micro Devices said it was spinning off its manufacturing operations in a new company backed by up to $6 billion from an Abu Dhabi investment firm.

Among other technology bellwethers, Apple shares lost .9 percent to $97.26, Google fell $12.60 to $358.61 and AMD rival Intel advanced 1.5 percent to $17.18.

Big movers included Qualcomm, up 3.4 percent to $41.57 and SAP, down 7.3 percent to $36.79.

In Europe, where banks and other financial institutions remain under pressure, the Fed’s move pushed stocks higher. In afternoon trading, The FTSE 100 climbed 1.6 percent to 4,661, the German DAX edged up .5 percent to 5,414 and the French CAC 40 rose 2 percent to 3,787.