Wall Street gyrated between hope and fear yesterday before losing more ground, as investors assessed the impact of yet another unprecedented government intervention.

The Dow Jones Industrial Average finished at 9,258 -- down 189 points, or 2 percent, after the Federal Reserve and other major central bankers unleashed a coordinated round of interest-rate cuts in an effort to restore stability and confidence to traumatized credit markets around the world.

The Fed cut a key short-term interest rate to 1.5 percent from 2 percent, a move designed to stimulate the economy by encouraging lending and borrowing. The European Central Bank and central banks from Britain and Switzerland to Canada and China followed suit.

"They are literally pulling out all the stops," said Morris Segall, president of SPG Trend Advisors, a Baltimore consulting firm.

More moderate losses were posted by the Standard & Poor's 500 and the Nasdaq, which declined 1 percent. The Post-Gazette/Bloomberg index of regional stocks fell 2 percent.

Locally, advancing issues were paced by Consol Energy, which rose 11 percent to finish at $36.95, up $3.74. Profit worries made Universal Stainless & Alloy Products the biggest loser.

Bridgeville-based Universal fell nearly 15 percent to $16.05 after cutting its third-quarter profit forecast in half. Alcoa, which reported a 52 percent drop in third-quarter earnings after the market closed Tuesday, fell 12 percent. Its shares closed yesterday at $14.71, down $2.

The interest-rate cuts announced early yesterday follow the government-engineered rescues of Bear Stearns, mortgage giants Fannie Mae and Freddie Mac and insurer AIG, and the strengthening of the bank deposit insurance as well as extending protection to money-market mutual fund investors.

"They're trying. They're doing what they can," said Federated Investors Senior Vice President Joseph M. Balestrino.

Global Insight economist Brian Bethune called the coordinated action "long overdue," adding, "These moves are much more effective than unilateral action in terms of defusing the contagion."

But it will take time for the measures to take hold. Until that happens, most are expecting the economy to continue weakening.

"I see no quick fix to this. We're not even sure how deep the hole is," said David Hunter, chairman of Hunter Associates, a Downtown investment adviser.

Treasury Secretary Henry Paulson yesterday said the administration is moving speedily to begin the largest financial system rescue effort in history, but even with the $700 billion program to buy bad assets from financial institutions, some banks will fail. He also called for patience, saying, "The turmoil will not end quickly, and significant challenges remain ahead."

"Getting it right is as important as getting it done quickly," Mr. Paulson said at a Treasury briefing. He said it would be several weeks before the program makes its first purchases of troubled assets.

The secretary spoke to reporters at a preview of meetings later this week of the finance officials of the Group of Seven major industrial countries, the 185-nation International Monetary Fund and the World Bank.

Mr. Balestrino predicted that the unemployment rate, currently at 6.1 percent, will be "undeniably going over 7 percent in the next three to six months." He added: "We're seeing real signs that consumers are under more stress than they had been. I'm worried that the consumer recession is just starting."

Bank of New York Mellon chief economist Richard B. Hoey is forecasting "substantial economic declines" in both the fourth and first quarters, "followed by the onset of sustained expansion at a moderate pace in the second half of 2009."

There is some irony that policy makers are using lower interest rates to combat the economic crisis that has brought credit markets to a virtual halt.

"It was low interest rates that helped make these mortgages affordable," Mr. Hunter noted, "so low interest rates helped create the problem of booming housing prices, which is at the center of the cyclone."

The Fed previously had worried that lower rates would spark inflation. But with oil and other commodity prices falling because of the weakening economy, fears of rising prices have waned.