Although the Federal Reserve cut the federal funds rate by three-quarters of a percentage, the Dow dropped 89 points to 12,011 over recessionary fears. Nasdaq plunged 33 points to 2307.

On the upside

FirstMerit (Nasdaq: FMER) reported higher fourth quarter earnings that beat expectations by a penny as the bank trimmed its borrowing costs.

Bernstein Research analysts Colin MacGranahan and Uta Werner upgraded Williams-Sonoma (NYSE: WSM) saying that the stock price has a very limited downside after recent declines.

Although KeyCorp (NYSE: KEY) reported sharply lower fourth quarter earnings, the results surpassed expectations.

On the downside

Northstar Neuroscience (Nasdaq: NSTR) announced disappointing results from a late stage clinical trial of its stroke treatment Everest.

Corinthian Colleges (Nasdaq: COCO) trimmed its outlook after three student loan providers announced more stringent lending policies.

Shares of Motorola (NYSE: MOT) tumbled ahead of tomorrow's earnings release.

In the broad market, declining issues outpaced advancers by a margin of more than 3 to 2 on the NYSE and by nearly 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks added a fraction to 674.