U.S. stocks fell Tuesday afternoon following the Federal Reserve's decision to cut its benchmark interest rate by a quarter-point to 4.25 percent.

Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation, the Federal Open Market Committee said in a statement after meeting today in Washington. The change should help promote moderate growth over time.

The Fed announced its decision at 2:15 p.m. EST amidst economists' expectations of a rate cut of at least a quarter of a percentage point or half a point.

The Dow Jones Industrial Average fell 265.24 points to 13,461.79 at 3:23 p.m. The S&P 500 fell 31.69 points to 1,484.27 while the Nasdaq Composite climbed 54.54 points to 2,664.41.

AT&T shares were up 5.4 percent after the company said it is increasing its dividend by 13 percent and will buy back 400 million shares.

Citigroup Inc. was down 3.8 percent after the Fed announcement. Earlier in the day, the stock rose after the Wall Street Journal said the firm named Vikram Pandit as its new CEO.

Texas Instruments shares rose 2.18 percent after increasing its sales forecast noting a higher demand for its power notebook chips.

Citigroup New york city