Shares of Disney closed 4.04 percent lower, off session lows but posting its worst day since Jan. 15. Macy's closed down almost 15.2 percent and Fossil closed nearly 29.1 percent lower after reporting earnings.
"I don't think today's sell-off is a case of everyone running for the doors. You just have one really big stock that is weighing on the averages and a couple of smaller ones," said JJ Kinahan, chief strategist at TD Ameritrade.
Kinahan and other market analysts also attributed the declines in stocks to the sentiment Tuesday's gains were overdone.
The major stock averages initially pared losses after the mid-morning inventory report, with the Nasdaq composite trying for gains and the S&P 500 mildly lower.
U.S. crude oil futures settled up $1.57, or 3.52 percent, at $46.23 a barrel, its highest in six months. Oil turned higher and extended gains after the EIA's weekly inventory report showed a decline of 3.4 million barrels, versus expectations of a slight build.
However, Warne said, "the fundamental directives still are that global production is high and demand growth is slow." Meanwhile, she said higher oil prices would support higher gasoline prices and further weigh on consumer spending.
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"Oil closed at a new high for the year. ... That would have translated into a good stock market but earnings (are) finally catching up to the stock market," said Peter Cardillo, chief market economist at First Standard Financial.
With Wednesday's declines, the Dow erased gains for the week so far, while the S&P and Nasdaq composite are on track for slight weekly gains.
Dow component Disney reported its first earnings miss in five years, while revenue was also below forecasts. Factors affecting results included decline in ESPN ad revenue due to the timing of college football playoff games and higher pre-opening expenses at Shanghai Disney Resort, the company said.
Studio revenue for the quarter increased 22 percent to $2.1 billion, powered by the box-office success of "Star Wars: The Force Awakens" and animated movie "Zootopia," Reuters said.
Macy's lowered its full-year forecast, with CEO Terry J. Lundgren noting "continued weakness" in consumer spending in the press release. Quarterly earnings topped expectations, while revenue came in below estimates.
"I think in some sense more of a concern might be Macy's," Kinahan said. "It just continues to give the conundrum about what's going to happen to these brick and mortar stores going forward. They're just having a tough time and you're seeing it in earnings."
He's watching Nordstrom earnings, due after the close Thursday, and April retail sales, expected Friday morning.
In other corporate news, Staples and Office Depot ended their planned merger deal after a judge sided with the Federal Trade Commission in its effort to block the deal on competitive grounds. The companies do not plan to appeal the decision.
Shares of Office Depot plunged nearly 40.4 percent for its worst day since its IPO in 1988. Staples closed 18.3 percent lower.