Updated from 7:11 a.m. EDT

Premarket futures swung from heavy losses to trade choppily Wednesday after the Federal Reserve authorized a 50-basis point reduction in the fed funds rate. The rate cut, which was coordinated with a rate cut by the European Central bank as well as lenders in Britain, Canada, Sweden and Switzerland, marks a significant step in efforts to stem a global economic slowdown and free up constrained credit markets.

After falling as much as 28 points in earlier trading, S&P futures are down 15.8 points at 990, and 9.75 points below fair value. Nasdaq futures are down 30.25 at 1306.25, and 33 points below fair value.

The Fed's rate cut reduces the target interest rate to 1.5%. The ECB reduced its key rate half a point to 3.75%, and the Bank of England cut rates 50 basis points to 4.5%.

On Tuesday, stocks fell hard as credit markets remained tight after an unprecedented Federal Reserve decision to begin buying commercial paper from U.S. businesses. Speaking in the afternoon before the National Association of Business Economists, Fed Chairman Ben Bernanke said the economy was at risk for a painful slowdown and offered hints of the rate cut that would come the following morning.

After Bernanke's comments Tuesday afternoon, the Dow Jones Industrial Average sloughed off 508 points, and the S&P 500 dropped 5.7%, reaching a five-year low. The Nasdaq dropped 5.8%.

Before the internationally coordinated rate cuts, conditions were looking dire Wednesday. As evidence of a worldwide slowdown piled up, European governments struggled to put together their own rescue plans. The U.K. government set up an $87 billion rescue package for U.K. banks.

Indices abroad had been hurting. In Europe, London's FTSE and Frankfurt's DAX were each down at least 4.3%. Asia fared worse; Japan's Nikkei closed down 9.4%, and Hong Kong's Hang Seng dropped 8.2%.

Lately, however, European indices were off their lows, as the FTSE ticked up 1% and the Dax pared its losses, trading down 0.3%.

Stateside, investors faced the final day of trading with the Securities and Exchange Commission's temporary ban on short-selling of more than 900 financial stocks. The moratorium, implemented in mid-September, is set to expire at midnight, and the SEC gave no sign it would extend the ban.

As for company news, The Wall Street Journal reported Citigroup ( C) is looking for partners in its buyout of Wachovia ( WB). Citi and Wells Fargo ( WFC) had earlier agreed to cease their buyout battle for Wachovia until noon Wednesday.

To kick off earnings season, aluminum processor and Dow component Alcoa ( AA) reported a decline in third-quarter profit thanks to rising costs and softening demand.

Bulk retailer Costco ( COST) said its fourth-quarter profit rose year over year, but nevertheless fell short of Wall Street estimates.

Earnings from agricultural-goods producer Monsanto ( MON) are expected before the start of the new session.

Looking at the day's economic data, pending home sales figures from the National Association of Realtors are due out Wednesday, as are weekly oil inventories from the Energy Information Administration.

Over in the commodities arena, crude oil was declining 81 cents to $89.25 a barrel. Gold was advancing $24.40 to $906.40 an ounce.

Longer-dated U.S. Treasuries were mixed. The 10-year was down 6/32 to yield 3.53%, and the 30-year was gaining 19/32, yielding 4%. The dollar was declining sharply vs. the yen and inching downward against the yen and pound.