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 %.

In the interest rate cut game played by Bernanke and Trichet (still to play), the bund future has shown its volatile character. The blu trendline has been forced twice but bund has always bounced back below it. We think that it could be an important resistance because Trichet does not reckon a rate cut would be a good solution for EU well being. Our first support is 116.04 while next resistance is today's high at 117,55. High volatility is still expected.

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The dollar traded as low as 106.87 Japanese yen before recovering to 107.30 yen during yesterday's session.

The euro lower against the dollar today as markets were waiting for a speech by FED Chairman Ben Bernanke that could give information about further U.S. rate cuts. Euro bought $1.4649 in morning European trading while the British pound was at $1.9642.

Bernanke is scheduled to address the U.S. Congress' House Budget committee about the economy today, with analysts and markets looking for insights into what might be done to help the economy recover from the effects of a credit crisis.

Wall Street is expecting additional Federal Reserve interest rate cuts. The U.S. central bank has been cutting rates three times to 4.25 percent recently.

Lower interest rates can push a country's economy but may have bad effects on its currency as traders transfer money to countries where they can earn higher returns.

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.

Investors collected profits after nearly three sessions of big gains, unwilling to leave money on the table amid ongoing economic uncertainty.

The chart below shows how the market reacted to the FED's rate cut.

It is interesting to note that immediately after the FED's decision, the Dow Jones Industrial index was pushed up by speculative movements. In one hour it had gained 220 points, passing from 12,461 points to 12,681.

Then it firmly pulled back, with traders awaiting key reports on the job market and manufacturing set to arrive on Friday. The Dow, which had been up more than 200 points after the Fed's decision, closed down 0.30%, at 12,442.83.

Investors' concerns about the state of the economy have not let up yet.