Updated from 12:42 p.m. EDTStocks 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%.