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NEW YORK — With Wall Street increasingly worried about a recession, investors sold off stocks Wednesday after the Federal Reserve said it would lower interest rates for the second time in a month. 

Investors interpreted the Fed’s announcement as a reason to take profits from the market’s recent gains. Although they know lower rates should eventually lift earnings and the economy, investors couldn’t be sure how long that would take. 

Analysts had expected the post-announcement selling because the market had already factored the half-point rate cut into stock prices. 

“This was the most telegraphed rate cut in history,” said Gary Kaltbaum, a technical analyst at JW Genesis. 

“The market is just hanging in there,” Kaltbaum said. “There are still issues in the marketplace, recession and the quality of earnings going forward...The main question now is: Do we go into a recession or not?” 

Investors have been shaken by recent reports showing the economy has slowed more than analysts expected. But they also are optimistic the economy and corporate earnings will pick up as interest rates fall. 

Wall Street has “confidence in that (lower) interest rates usually, but not instantly, improve the economy. But that is being counterbalanced by a litany of downgrades of earnings and layoffs,” said Robert Stovall, market strategist for Prudential Securities. 

Adding to investors’ worries was a report issued earlier by the Commerce Department that said the gross domestic product grew at an annual rate of just 1.4 percent during the final three months of 2000.  

That performance, the weakest in more than five years, was much slower than many analysts expected and was caused by a plunge in spending on cars and computers. 

Investors showed the most caution in the tech sector, which has suffered the bulk of earnings disappointments. Soft profits and reduced outlooks again hurt long-battered stocks. 

— The Associated Press 

Applied Materials lost $2.13 to finish at $50.31. The maker of semiconductor equipment said after the market closed Tuesday that sales for its fiscal first quarter would fall below estimates as customers cut back purchases. 

Amazon.com, which warned late Tuesday of a future slowdown and said it was cutting 1,300 jobs, fell $1.63 to $17.31. 

The Dow got a big boost from the retailing sector, which tends to rise when interest rates are lowered and consumers spend more. Wal-Mart advanced $3.03 to $56.80. 

Stocks in the drug and consumer staple sectors, which typically fare better during economic slowdowns, also provided some lift. Merck rose $1.18 to $82.18, while Procter & Gamble climbed 74 cents to $71.84. 

But financial stocks slipped after experiencing recent gains. American Express traded down 81 cents at $47.10. 

Advancing issues outnumbered decliners 9 to 7 on the New York Stock Exchange, where consolidated volume was 1.55 billion shares, compared with 1.38 billion on Tuesday. 

The Russell 2000 index, which tracks the performance of smaller company stocks, fell 3.32 to 508.34. The Russell was up nearly 3 points before the Fed announcement. 

Overseas markets were mixed. Japan’s Nikkei stock average rose slightly, up 0.1 percent, Germany’s DAX index gained 0.8 percent, and France’s CAC-40 rose 1.4 percent. But Britain’s FT-SE 100 fell 0.6 percent. 

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