The Dow Jones industrial average, down 465 points shortly after trading began, fluctuated throughout the session before closing with a milder drop of 128.11, or 1.06 percent, at 11,971.19, according to preliminary calculations.

U.S. stocks began the day by following the lead of markets abroad that had plummeted for two straight days, and also extended their own steep losses from last week. Fears of a U.S. recession — one that would spread to other economies — had investors fleeing stocks worldwide.

The Fed, in a move anticipated by many traders, moved before the opening of U.S. trading, cutting its benchmark federal funds rate by 0.75 percentage point. The Dow and other major indexes then spent the day fluctuating violently, at times approaching the break-even point before heading down again.