Updated from 12:42 p.m. EDT

Stocks on Wall Street were trading choppily Wednesday afternoon following a move by the

Federal Reserve

to cut its target interest rate to 1%.

The

Dow Jones Industrial Average

was lately down 61 points to 9004, and the

S&P 500

was giving back 5 points to 935. The

Nasdaq

was tacking on nearly a point to 1650.

Following a two-day meeting that began Tuesday, the Fed announced it had cut its key interest rate by 50 basis points to 1%, a move that had been widely expected by investors.

In its policy statement accompanying the cut, the central bank said that its board of governors had voted unanimously for the change. It said that the economy has slowed substantially and it expects inflation to moderate to levels of price stability.

Tumultuous credit markets are likely to continue to restrain spending, the Fed said. The agency also noted that recent policy action, including "extraordinary liquidity measures," should help improve credit conditions.

"The real story regarding the Federal Reserve is its various liquidity operations; the federal funds rate is second fiddle," wrote Tony Crescenzi, chief bond market strategist at Miller Tabak, on his

RealMoney.com

blog this morning. He said that household and business debts are tied to the prime rate, which in turn is pegged to the target fed funds rate. As such, a reduction in the target rate would still have an impact, he wrote.

Lending markets had shown signs of relaxing ahead of the Fed's decision. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, fell 5 basis points to 3.42%. The overnight Libor rate declined 10 basis points to 1.14%.

Crescenzi also wrote that the Fed's statement accompanying its decision will be important as well. He said that the Fed should acknowledge more forcefully the current deflationary environment.

Corporate earnings were also occupying investors' attention. Electronics manufacturer

Sony

(SNE) - Get Report

reported a 72% decline in its quarterly profit due in part to recent sharp appreciation of the yen.

In the telecommunications space, cable company

Comcast

(CMCSA) - Get Report

reported rising net income. Telecom services firm

Qwest

(Q)

posted declining revenue and earnings and said it would cut 1,200 jobs during the fourth quarter.

Oil refiner and gas station operator

Hess

(HES) - Get Report

posted higher quarterly earnings.

Meanwhile, glass-panel manufacturer

Corning

(GLW) - Get Report

reported revenue that was below expectations and reduced its fourth-quarter sales guidance.

Garmin

(GRMN) - Get Report

, which makes navigational devices, fell short on its quarterly profit and warned that full-year results will also miss forecasts.

As for consumer staples,

Procter & Gamble

(PG) - Get Report

bested analysts' profit estimates, and packaged-food firm

Kraft

(KFT)

said its income rose year over year on a one-time gain from its disposal of the Post cereal business.

The government's Troubled Asset Relief Program remained in focus, as

The Wall Street Journal

reported that

GMAC

, a finance company jointly owned by

General Motors

(GM) - Get Report

and

Cerberus Capital

, is applying for status as a bank holding company to access the Treasury Department's $700 billion capital-injection plan for banks.

For its part, GM announced Wednesday that it sold 2.1 million vehicles in the third quarter, down 11% from a year ago.

The

Journal

also reported that cell-phone maker

Motorola

(MOT)

is working to cut back its phone division and refocus on using

Google's

(GOOG) - Get Report

Android software for its devices.

In analyst actions, consumer-goods firm

Johnson & Johnson

(JNJ) - Get Report

caught a JPMorgan downgrade to neutral from overweight.

Moving to economic data, the Census Bureau's read on September durable-goods orders showed a surprise 0.8% uptick, up from a 5.5% decline in August and better than the 1% drop expected by economists. Excluding transportation, new orders dropped 1.1%, and taking out defense, they edged down 0.6%.

The Energy Information Administration reported that crude-oil inventories rose by 500,000 barrels for the week ended Oct. 24, an increase that fell short of expectations.

Following the report, crude oil was soaring $5.30 to $68.03 a barrel. Gold gained $13.50 to $754 an ounce.

Longer-dated U.S. Treasury securities were higher. The 10-year was up 8/32 to yield 3.81%, and the 30-year was up 18/32, yielding 4.16%. The dollar was falling sharply vs. the euro, yen and pound.

Overseas, European exchanges were mixed, as the FTSE in London moved higher and the DAX in Frankfurt was edging downward. As for the

Asian exchanges

, Japan's Nikkei closed sharply higher, while Hong Kong's Hang Seng logged a modest gain.