Interest-rate-sensitive stocks stayed pretty much right where they where after the

Federal Reserve announced its widely expected decision to drop benchmark interest rates by a half-point to 5.5%. Financial and high-tech stocks continued to fall, while retailers and other cyclical stocks continued to rise, all at a relatively leisurely pace.


Philadelphia Stock Exchange/KBW Bank Index

, which tracks bank stocks, was falling 1% and the

American Stock Exchange Broker/Dealer Index

was off 1.5%. The

Morgan Stanley High-Tech 35

was falling 2%. The

S&P Retail Index

was up 3.8%, and the

Morgan Stanley Cyclical Index

was rising 0.7%.

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All of these sectors have rallied sharply in the past few weeks in anticipation of the rate cut. There was some debate about whether they had any more room to rally or would sell-off on the news. So, they are mixed, making all crystal clear, right?

The rate cut earlier this month prompted a severe selloff in these sectors. On Jan 4, the day after the Fed surprised the market with an unusual intermeeting rate cut and its first move lower in over a year and a half -- the five sectors were met with furious selling. They've since made their way back. That's partly because big Fed rate cuts simultaneously inspire optimism that economic recovery is on its way and pessimism that things are bad enough to require such cuts.

In the red most of the morning, financials initially snapped higher on the rate cut news, but quickly lost their gumption and slipped back into negative territory. Wall Street was likely spooked after the Philly Bank Index peaked at an all time high yesterday. A slowing economy has cut into the sector's profits because of growing problem loans and dwindling investment banking revenues caused by a soft stock market.

An upbeat analyst community may be helping to support retailers. One report out of

Goldman Sachs

on Jan. 22 said worries about a recession and its effects on the sector were overblown: "Favorable signals from our leading indicators of spending, combined with the likelihood of declining fuel costs, a tax cut and further interest rate reductions, suggest that real spending growth will rebound to 4% in the second half from an estimated 3% currently," the report said. The sector has rallied sharply since Jan 19, up 8% through Tuesday's close.

In theory, when the Fed starts cutting rates, retail stocks ought to start moving up. Lower rates fatten consumer pocketbooks by making saving less lucrative and by reducing costs on everything from credit card bills to mortgage payments. And that makes it easier for consumers who want to spend more money at their local

Home Depot

(HD) - Get Home Depot, Inc. (HD) Report



(WMT) - Get Walmart Inc. Report


So who knows where interest rate sensitive stocks will go from here. The question now: When's the next rate move?