Stocks fell last night to their lowest since early April after the Fed cut interest rates for the seventh time this year, but gave investors little hope the sluggish economy is rebounding.

"Everybody wants instant gratification for things to stabilise but there's no reason in the world why it should occur this way," said Donna Van Vlack, head of trading at Brandywine Asset Management. "You still have companies having big problems and you've got a lot of lay-off announcements that have to be worked through. It's going to take time and patience."

Stocks turned negative after the central bank cut its key federal funds interest rate, which is what banks charge each other for overnight lending, from 3.75 per cent to 3.50 per cent - its lowest level since Spring 1994.

In the past, Fed easing was nearly guaranteed to give Wall Street a jolt because investors anticipated lower rates would boost corporate profits. But the latest cuts left investors cold as this year's profits are forecast to show the worst drop in a decade.