* Australian stocks set to drop for second straight day
* Tech shares track losses on Nasdaq
* NZ's Fonterra hits over 2-1/2-year high
By Aditya Munjuluru
March 5 (Reuters) - Australian shares fell on Friday, following a slump on Wall Street as investors turned jittery after U.S. Federal Reserve Chair Jerome Powell failed to quell concerns around rising U.S. bond yields.
The S&P/ASX 200 index .AXJO fell as much as 1.1% to 6,687.1 by 0002 GMT.
Overnight, the Dow Jones Industrial Average .DJI fell 1.1% and the S&P 500 .SPX lost 1.3%. The Nasdaq .IXIC dropped 2.1% and was down nearly 10% from its February record high.
Powell's comments did not point to changes in the Fed's asset purchases to tackle the recent jump in yields, even as some investors had expected it would step up purchases of long-term bonds. .N
The Australian benchmark was still on track to record modest gains for the week, helped by upbeat fourth-quarter gross domestic product data and the central bank's pledge to hold interest rates at a record low earlier this week.
Technology stocks .AXIJ tracked losses in the tech-heavy Nasdaq and fell 3.5%. Nearmap NEA.AX shed 4.1%, while buy-now-pay-later giant Afterpay APT.AX gave up 2.8%.
The mining sub-index .AXMM slid 0.6%, weighed down by a 12.5% drop in lithium-boron supplier Ioneer INR.AX after a discounted share placement. Rio Tinto (LON:RIO) RIO.AX and BHP BHP.AX declined as much as 2.9% and 2.1%, respectively.
However, energy stocks .AXEJ outperformed as they surged 3.1% after crude prices hit a more than one-year high overnight. O/R
Oil Search OSH.AX rose 4.51% and Woodside Petroleum WPL.AX gained 3.9%.
New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.8% to 12,121.6.
Dairy producer Fonterra FCG.NZ hit its highest since August 2018 after it raised the outlook for prices it would pay farmers for the 2021 season for the second time in just over a month.