US STOCKS-Wall Street unconvinced by Fed emergency rate cut

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* Indexes close to flat: Dow -0.2%, S&P flat, Nasdaq +0.1%
* Fed cuts rates by half point
* Concerns about virus impact still dominate

(Updates to open)
By Medha Singh
March 3 (Reuters) - The main U.S. stock market indexes
inched lower in volatile trading on Tuesday, as investors
worried even a shock emergency half-point cut in interest rates
might not be enough to shield the world's largest economy from
the impact of the coronavirus epidemic.
The U.S. Federal Reserve's decision to lower borrow costs
before its next scheduled policy meeting in mid March reflected
the urgency with which the central bank felt it needed to act to
stave off a global recession and shares initially jumped more
than 1 percent on the news. But they quickly turned negative before settling between
flat and 0.2% lower on the day .DJI .SPX .IXIC as analysts
and traders worried whether pumping more money into banks and
financial markets may not address the central problem of the
epidemic - a cut in business activity as workers and consumers
stay home.
"The Fed panicked which they're very good at doing and it
was a mistake," said Michael O'Rourke, a strategist with Jones
Trading in Stamford, Connecticut.
"The Fed cutting rates by 50 basis points now is not going
to get people to go to the movies or to conferences, sporting
events or any large gatherings."
The U.S. central bank cut rates three times in 2019 and has
since held the fire amid signs of improving growth after the
striking of a "Phase One" trade deal between the United States
and China.
The main U.S. stock indexes had closed more than 4% higher
on Monday after their worst week since 2008, as central banks in
Japan and the European Union joined the Federal Reserve in
signaling further monetary easing.
Earlier in the day, finance ministers of the G7 and central
bank governors said only that they stood "ready to take actions,
including fiscal measures where appropriate". Bank stocks .SPXBK , which tend to outperform in higher
interest rate environment, dropped 2.2% while the broader
financials .SPSY sector fell 1.5%. Nine of the 11 major S&P
sectors were trading higher.
"Clearly the Fed doesn't want to fall behind the curve,"
said Chris Zaccarelli, chief investment officer, Independent
Advisor Alliance, Charlotte, NC.
"They're trying to be proactive and front-load their
response both by cutting 50 bps instead of their usual 25 bps as
well as by cutting intra-meeting instead of waiting until later
this month."