In the end, after a bit of turbulence, major market averages closed out the session in the general neighborhood of where they stood before the announcement that the

Federal Open Market Committee

, as expected, raised its target for the fed funds rate 25 basis points to 5.25%.

"Today's increase in the federal funds rate, together with the policy action in June and the firming of conditions more generally in U.S. financial markets over recent months, should markedly diminish the risk of rising inflation going forward," the Fed said in a

statement. "As a consequence, the directive the Federal Open Market Committee adopted is symmetrical with regard to the outlook for policy over the near term."

About 10 minutes after the Fed announcement, the

Dow Jones Industrial Average

, the

S&P 500

and the

Nasdaq Composite Index

rallied and jumped to their best levels of the session. Roughly 15 minutes after peaking intraday, the Dow had tumbled to its session nadir.

Tech rallied, with

Microsoft

(MSFT) - Get Report

enjoying a whopping advance, while semiconductor stocks jumped handsomely. The

Philadelphia Stock Exchange Semiconductor Index

surged 2.7%.

While stocks ended the session mostly lower -- breadth was negative on the

New York Stock Exchange

and the

Nasdaq Stock Market

-- bonds advanced. Stocks have rallied lately on the hope that the Fed will sit on the sidelines for the rest of the year once they got today's tightening finished. The FOMC next meets on Oct. 5.

The fed funds rate is the rate banks charge one another for overnight loans.

The Fed also bumped up the largely symbolic discount rate 25 basis points to 4.75%.

On the NYSE, decliners defeated advancers 1,686 to 1,284 on 723 million shares. On the Nasdaq, losers beat winners 2,127 to 1,749 on 1.02 billion shares.

On the NYSE, 96 issues set new 52-week lows while 55 touched new highs. On the Nasdaq, 117 issues set new 52-week highs while new lows totaled 74.

On the Big Board,

America Online

(AOL)

was most active with 20.5 million shares changing hands. It was down 1/4 to 98 3/4.

On the Nasdaq, Microsoft was most active with 59.8 million shares changing hands. It was up 5 11/16, or 6.6%, to 92 3/16 thanks to a favorable appellate court ruling.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

Earlier...

3:02 p.m.: Stocks Mostly Lower After Fed Announcement

Major stock proxies peaked about 10 minutes after the announcement of the

Federal Open Market Committee's

widely anticipated move of raising the target on the federal funds rate 25 basis points to 5.25% and then sold off.

1:59 p.m.: Stocks Mixed in Countdown to FOMC Announcement

With everyone -- and it's probably not a stretch to say this -- sick and tired of waiting, hearing, and reading about the market waiting for the results of the

Federal Open Market Committee

meeting this afternoon, stocks were mostly weaker overall.

1:15 p.m.: Midday Musings: Market Takes Prelude to Fed Decision in Stride

12:07 p.m.: Stocks Little Changed in Light Volume

Keep on humming the

Jeopardy

theme. The answer: The market is down as everybody anticipates this report, which will be released at 2:15 p.m. EDT. If you said, "What is the statement from the

Federal Open Market Committee

?" then Mr.

Trebek

has a cookie for you.

11:07 a.m.: Stocks Turn Mixed as FOMC Continues to Meet

Yesterday, the market cannonballed into the deep end and drove the

Dow Jones Industrial Average

to a record close. Today a whistle blew. At buddy check, all the kids were sitting holding hands at the edge of the pool, waiting. The market is mixed as everybody anticipates the

Federal Open Market Committee's

statement, which will be released at 2:15 p.m. EDT.

9:53 a.m.: Stocks Mostly Lower as FOMC Meets

The day is at hand.