The prime serves as benchmark for a wide variety of rates on everything from credit cards to home equity loans. Investors initially jumped on the news, but the Dow Jones industrial average ended down 25 points to close at 8986. Tuesday's cut brought the federal funds rate to its lowest level in four years. It was the third cut since Sept. 29, when the Fed cut rates for the first time in three years. The jobless rate is still close to a 24-year low, but job growth is slowing.
Corporate layoffs are back and on the rise.
Factory payrolls are down 200,000 since March. Consumer confidence is high, but the Conference Board's index is down about 15 percent from July's record high. Detroit News Wire Services contributed to this report.