The Nasdaq composite index rose 9.81 points to 2,001.93, buoyed in part by news from wireless company Nokia. The Dow Jones industrial average was off 33.08 points to 9,888.37 after an earnings warning by pharmaceutical giant Merck. CNET's technology indexes were mixed.
The Federal Reserve did exactly what investors were expecting Tuesday: It cut interest rates for the 11th time this year, citing continuing economic weakness. The federal funds rate was lowered by 25 basis points to 1.75 percent, a level not seen since the early 1960s. The Fed also lowered the discount rate, the interest rate it charges banks to borrow.
Analysts took the Fed's statements as a sign that there may be more interest-rate cuts next year.
"In the announcement the Fed also indicated that 'the risks remain weighted toward conditions that generate economic weakness'--the Fed's way of saying that the bias is still for easing policy," said Merrill Lynch analyst Mary L. Dennis.
The policy-makers are scheduled to set interest rates again Jan. 30, 2002.
On the technology front, Nokia gained $1.71, or 7 percent, to $25.50 after news that the company's fourth-quarter earnings may top estimates thanks to cost cutting and increased market share. The Finland-based company said it is benefiting from a new line of Internet phones.
Nokia said it now expects sequential sales growth around 20 percent, adding that phone sales for the fourth quarter are expected to rise 25 percent compared with the third quarter, in line with earlier predictions.
Competitor Ericsson rose 19 cents, or 3 percent, to $6.01. Motorola was up 17 cents, or 1 percent, to $16.82.
Xilinx revised predictions for its third quarter. Shares were up 94 cents to $41.55. The maker of programmable semiconductors said sales will likely be at the high end of analysts' $205 million to $213 million range.
GoAmerica blasted up $1.37, or 122 percent, to $2.49 after news that IBM has agreed to use its technology. IBM shares were up $1.84 to $121.50.
Among other actively traded shares, Intel rose 24 cents to $33.19; Oracle fell 31 cents to $15.11; and Microsoft rose 26 cents to $67.32.
AOL Time Warner gained $1 to $32. Yahoo rose 60 cents to $18.42, and Amazon.com was up 59 cents to $12.24.
Staff and Reuters contributed to this report.