Economic data will continue to be scrutinized as investors try to determine what the awareness of the Federal Reserve is regarding the economy. Investors are angling for a half-point cut following its emergency three-quarter-point cut last week.

The Fed's coming up rate decision is obviously the market's focus this week, so trading will be marked by investors' conjectures about policymakers' thoughts on the weak economy. With a decision not expected until Wednesday afternoon, the market in the meantime digested Tuesday's data on earnings, consumer spending and durable goods.

In midmorning trading, the Dow Jones industrial average rose 49.27, or 0.40 %, to 12,433.16.

Broader indexes were mixed. The Standard & Poor's 500 index rose 3.86, or 0.29 %, to 1,357.82, and the Nasdaq composite slipped 3.37, or 0.14 %, to 2,346.54.

The dollar was mixed against most major currencies except the yen, and gold prices rose.

Oil prices moved higher as traders waited to see what the Fed's next move will be. A barrel of light sweet crude fell 11 cents to $90.88 a barrel on the NYMEX.

The Russell 2000 index of smaller companies fell 3.34, or 0.48 %, to 699.05.

In Asian trading, Tokyo's Nikkei stock average rose 2.99 %; Shanghai's key index rose 0.87 %; and Hong Kong's main index rose 0.99 %. In European trading, London's FTSE rose 1.30 %; Frankfurt's DAX rose 1.31 %; and Paris' CAC rose 1.83 %.

A shock three-quarters of a percentage point reduction.  Analyst Jeremy Stretch of Rabobank, described the Fed's move as "a sign of panic".

The US Federal Reserve has cut interest rates to 3.5%. A day after global markets sank due to worries of a possible U.S. recession, the Federal Reserve Bank decided to reduce the risk of further economic problems by a three-quarter point cut interest rate before U.S. markets opened.