Bank stocks had a mixed session Wednesday, as investors digested the effects of the Federal Reserve Board's rate cut and its assessment of the weakening economy.

The KBW Bank Index went up and down throughout the day, closing down 3.6%, after posting a 13% gain Tuesday in anticipation of the rate cut.

Michael O'Boyle, an investment banker at Sterne, Agee & Leach Inc., said bank stocks experienced volatility as investors assessed how various names would be affected by the Federal Open Market Committee's 50-basis-point rate cut in the federal funds rate, to 1%.

"The rate cut is not exactly good for all banks," Mr. O'Boyle said. "Those that are more asset-sensitive are going to see some net interest margin compression."

The Fed also reduced the discount rate by 50 basis points, to 1.25%.

"The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," the committee said in a press release Wednesday. "Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit."

The broader market also had a mixed session. The Dow Jones industrial average fell 0.82%, and the Standard & Poor's 500 fell 1.11%. Both indexes had gained nearly 11% Tuesday.

Fifth Third Bancorp rose 0.1% Wednesday. Umpqua Holdings Corp. rose 2.5%, and East West Bancorp rose 2.4%

Bank of America Corp. dropped 3%. Citigroup Inc. fell 4.2%. JPMorgan Chase & Co. fell 5%. Regions Financial Corp. fell 1.6%. PNC Financial Services Group Inc. dropped 3.9%. Wells Fargo & Co. fell 6.8%, and Huntington Bancshares Inc. fell 8.5%.

BOK Financial Corp. rose 1.7%. The $22.4 billion-asset Tulsa company said Wednesday that its third-quarter net income fell 5% from a year earlier, to $56.7 million, or 84 cents a share, mainly because of bad residential construction loans. However, the earnings beat the average analyst estimate by 7 cents, according to Thomson Reuters.

BOK said it was helped by a $19.4 million increase in the fair value of trading contracts related to the energy trading company SemGroup LP as oil prices dropped. That was partly offset by a $12.7 million writedown from exposure to Lehman Brothers, which filed for bankruptcy protection last month.

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