The Dow Jones industrial average fell 29.08 to close at 6,876.17, erasing a 47-point gain that came immediately after the Fed announced it raised interest rates for the first time in two years.

Advancers outnumbered decliners by a 10-to-9 margin on the New York Stock Exchange, with 1,323 up, 1,193 down and 806 unchanged. NYSE volume totaled 480.38 million shares vs. 442.16 million yesterday.

The Standard & Poor's 500-stock list fell 1.89 to 789.07, and the NYSE's composite index fell 0.59 to 415.41. The Nasdaq composite index rose 5.42 to 1,248.06, and the American Stock Exchange composite index fell 1.78 to 586.16.

The Nasdaq composite index was fueled by strength in a number of technology shares.

Stocks were higher for most of the day, but trading was tempered by investor caution ahead of the outcome of the Fed's policy-making committee meeting. The central bank announced an increase of a key benchmark rate from 5.25 percent to 5.5 percent at mid-afternoon.

Stocks initially rose on the much-anticipated increase, but those gains disappeared almost immediately as investors began to consider whether the Fed would again raise rates this year.

"What happened today is already history," said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis. "The market is already speculating what is next."

Bond prices also seesawed on the news, but eventually turned lower. The the yield on the 30-year Treasury bond -- a key determinant of corporate and consumer borrowing costs -- rose to 6.95 percent, up from 6.89 percent at midday today and 6.92 percent late yesterday.