In a surprise move Wednesday, the

Federal Open Market Committee cut its key

federal funds target rate by 50 basis points, to 6%.

Investing Strategies

Big News From the Fed! What's It Mean for the Long-Term Investor?

The Smart Money Is Split on What the Fed Move Means

Sector Plays

Semiconductor Prices on a Downward Spiral

Rate Cut May Not Solve Banks' Problems

Fed Panic Rally Masking the Bad News at Dell

Rate Cut Spurs Tech, but Has the Economic Horse Left the Barn?

Fed Who? Inktomi Plunges on Earnings Warning

Networkers Catch Rate-Cut Fire, but Some See Momentum Flickering Already

Biotechs Cheer, Drugs Jeer Rate Cut

Commentary

The Morning After: Hangover or New High?

Cramer Special: The Fed's on Your Side Now

The Mother of All January Effects Won't Give Birth to a Baby Bull

The Fed's Big Mistake ... Too Much Too Soon

Market Reaction

Who Made Who? Fed Actions Put the Market Front and Center

Wednesday's Market: Nasdaq Posts Best Gain Ever After Fed's Surprise Move

Fed Move Slices into Options Prices, At Least for Today

Long End of Treasury Market Battered Following Rate Cut

Pulse: Giddy Tech Investors Give Life to Beaten Up Chip Stocks

Perspective

Fed Moves and the Market: The Charts

Why Did the Fed Cut Rates Today?

The news sent the

Dow up more than 300 points while the

Nasdaq added 250, or 12%, as investors hoped that lower interest rates would get the economy back on its feet again.

Talk of recession has grown in the past month, particularly following

data Tuesday that indicated a sharp slowdown in manufacturing in December. The market had begun speculating about an intermeeting rate cut in the past week. But very few were expecting such a cut until Friday's

jobs report

.

So what does this surprise move really mean?

Merrill Lynch

TheStreet Recommends

economist Mary Dennis said it means the

Fed is worried about a hard landing and that interest rates need to be slashed another 75 basis points before the economy is out of the water.

Why did the Fed cut interest rates before the jobs report comes out on Friday?

Dennis:

Because the data are very weak.

How much lag before the effects of this 50-basis point cut show up in the economy?

Dennis:

The Fed needs to get to neutral funds rate -- around 5.25% -- before there are any real material overall economic effects.

Do you expect more intermeeting cuts?

Dennis:

Nothing is ruled out in terms of intermediate action.

Could this signal to the market that the Fed is panicking?

Dennis:

I think it's extremely important that the Fed gets to a neutral funds rate as soon as possible in order to avoid a hard landing. And right now we're at 6. I think the Fed realizes they have to get to neutral even if it's going to be done in a few quick swoops.