Stocks declined Wednesday as investors booed results from Morgan Stanley and a dismal outlook from economy gauge FedEx.
Oil slipped below $134 a barrel after the EIA reported that crude inventories shrunk by 1.2 million barrels last week, less than the 1.5 billion draw expected.
President Bush delivered a speech on energy, calling on Congress to lift a ban on offshore drilling.
Morgan Stanley reported its profit plunged 56 percentdespite $1.43 billion of pretax gains from asset sales. Revenue dropped in nearly every business. The results from the second-largest U.S. investment bank beat expectations but investors still hammered the stock -- and the banking sector -- amid concerns about the future.
The report is the third in this week's brokerage trilogy: Lehman Brothers on Monday reported a disappointing $2.8 billion loss. On Tuesday, Goldman Sachs , which has fared better than some of its rivals due to less exposure to the subprime mess, said its profit dropped 11 percent but beat expectations.