Stocks fell Wednesday, with the Dow briefly falling below 12,000 for the first time in three months, as oil surged in afternoon trading. The markets began to sell off Wednesday morning following weak quarterly results from FedEx and Morgan Stanley. The selling accelerated in afternoon trading as financial stocks joined in Morgan Stanley's disappointment. Oil prices rebounded after the U.S. government reported that crude inventories decreased slightly less than expected last week and President George W. Bush called for expanded U.S. production. Light sweet crude for July delivery rose $2.67 to $136.68 a barrel on the New York Mercantile Exchange after falling as low as $131.82 earlier in the session. U.S. retail gasoline prices eased slightly for the second consecutive day, and the U.S. dollar fell versus both the euro and the yen in afternoon trading, after climbing against the currencies for most of the morning. FedEx reported a fourth-quarter loss, hurt by high fuel prices and slowing growth in its domestic-package business. Profits at Morgan Stanley fell by more than half last quarter, hurt by a decline in its investment banking and sales and trading businesses. Shares of other financial companies weakened, including Merrill Lynch and Lehman Brothers. The Dow Jones industrial average fell 131.24, or 1.1 percent, to 12,029.06. Shares of Citigroup fell. The broader Standard & Poor's 500 index fell 13.12, or 1 percent, to 1,337.81. The technology-heavy Nasdaq composite index fell 28.02, or 1.1 percent, to 2,429.71. The New York Stock Exchange composite index fell 74.85 to 8,999.56. The American Stock Exchange composite index fell 5.11 to 2,307.30. And the Russell 2000 index fell 5.86 to 730.71.
