Stocks hovered near the unchanged mark at the closing bell, erasing early gains, after the Federal Reserve cut interest rates by a half a percentage point and left the door open to more cuts.

In a move that was largely expected, the Central Bank lowered short-term interest rates for the fifth time this year, putting its Federal funds rate, a benchmark for short-term interest rates, to 4.0 per cent from 4.5 per cent. Immediately after the announcement at 2:15 p.m., stocks spiked briefly, then fell back, only to zig-zag higher again.

The blue-chip Dow industrial average was down 10.93 points to 10,866.40. The broader Standard & Poor's 500 Index closed at 1,248.93. The technology-laced Nasdaq Composite Index was up 4.01 at 2,085.31.