A jubilant Wall Street barreled higher Wednesday after the Federal Reserve cut its benchmark interest rate a larger-than-expected half a percentage point. The Dow Jones industrial average was up more than 200 points shortly after the Fed announced its move.

The Dow was up 187.53, or 1.40 percent, at 13,590.95, dropping back slightly in the normal ebb and flow of trading less than 15 minutes after the Fed's decision.

Although some investors hoped for a large rate cut, most were betting on a smaller quarter percentage cut in the federal funds rate. The Fed responded to the spreading impact of credit market problems on the rest of the economy, saying, "the tightening of credit conditions has the potential to intensify the housing (market) correction and to restrain economic growth more generally."

The Fed cut the benchmark rate to 4.75 percent after keeping it unchanged for more than a year.