NEW YORK (CNN/Money) - Stocks slumped across-the-board Wednesday, as worries about earnings and oil prices sparked the biggest blue-chip sell-off in nearly seven weeks.

The Dow Jones industrial average (down 135.75 to 10,109.18, Charts) lost 1.3 percent and registered its biggest one-day point loss since August 6.

The Standard & Poor's 500 (down 15.74 to 1,113.56, Charts) index fell around 1.4 percent, and the Nasdaq composite (down 35.47 to 1,885.71, Charts) slumped around 1.8 percent.

Stocks started the day in negative territory and kept slipping from there, due to a mix of triggers.

"There's a major rise in oil prices, increased investor worry about the upcoming earnings season and you're also seeing some profit-taking after the market's six-week run-up," said Michael Sheldon, chief market strategist at Spencer Clarke.

As stocks slumped, Treasury bond prices rose, pushing the yield on the 10-year note below 4 percent for the first time since April.

Oil prices surged on global supply concerns after a weekly oil inventory report showed a steeper drop than analysts expected.

U.S. light crude oil for November delivery jumped $1.59 to settle at $48.35 a barrel on the New York Mercantile Exchange, a gain of 3.4 percent.

Reports are due Thursday on jobless claims and leading economic indicators.

Due before the open, a Labor Department report is likely to show that approximately 338,00 Americans filed new claims for unemployment last week, according to Briefing.com estimates. That's up from 333,000 new claims the previous week.

Due shortly after the open, the Conference Board's index of leading indicators is expected to have fallen 0.2 percent in August, after falling 0.3 percent in July.

Financial stocks were weak across the board.

Morgan Stanley (MWD: down $3.66 to $48.72, Research, Estimates) reported quarterly earnings that fell from a year earlier and missed estimates after a sluggish summer.

The negative news overshadowed other mostly positive brokerage earnings over the last two days.

Bear Stearns (BSC: down $2.14 to $87.95, Research, Estimates) reported revenue and earnings per share early Wednesday that fell from a year ago but nonetheless beat estimates.

Goldman Sachs (GS: down $1.51 to $93.39, Research, Estimates) and Lehman Brothers (LEH: down $0.18 to $79.57, Research, Estimates) reported stronger-than-expected results Tuesday.

The Amex Securities Broker-Dealer (XBD: down $4.28 to $125.27, Research, Estimates) index tumbled 3.3 percent.

Also weighing on the sector: mortgage financier Fannie Mae (FNM: down $4.96 to $70.69, Research, Estimates), which fell 6.5 percent after a government review questioned the company's accounting practices and reporting of its past earnings. The findings were part of an investigation announced more than a year ago.

"We've got earnings concerns today, and oil prices are still scaring everyone," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.

A downgrade of Cisco Systems (CSCO: down $0.69 to $18.96, Research, Estimates) weighed on the tech sector. Deutsche Bank cut Cisco to "hold" from "buy," citing an uncertain outlook for the big maker of computer network and Internet gear, especially in North America. Cisco stock sank more than 3.5 percent.

Semiconductor stocks fell, highlighted by Intel, down more than 3 percent. The Philadelphia Semiconductor (down 12.01 to 391.74, Charts) index, or the SOX, fell nearly 3 percent.

In other news, FedEx (FDX: down $3.48 to $85.21, Research, Estimates) reported earnings of $1.10 a share, double a year earlier and in line with analysts' estimates. But investors took the stock lower after the company projected second-quarter and full-year earnings that could fall short of forecasts.

Among other movers, shares of Wendy's International (WEN: down $2.16 to $33.34, Research, Estimates) fell after the company warned that third-quarter and full-year 2004 results won't meet estimates. The hamburger chain blamed rising beef prices, operational problems at its Baja Fresh Mexican Grill chain and the impact of hurricanes in the Southeast.

Credit Suisse First Boston led a parade of brokerages either downgrading Wendy's stock or trimming earnings estimates on the company following the news.

Stocks rallied in a late-session advance Tuesday after the Fed boosted the fed funds rate, a key overnight bank lending rate, a quarter-percentage point to 1.75 percent--its third increase this year. The move had been widely expected. The central bank also gave a fairly upbeat assessment of the economy.

But investors pulled back Wednesday.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by more than 11 to five on volume of 1.37 billion shares. On the Nasdaq, decliners beat advancers by nearly three to one as 1.58 billion shares changed hands.

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Treasury prices gained, pushing the 10-year note yield down to 3.97 percent from 4.04 percent late Tuesday. It was the first time the yield has fallen below 4 percent since April. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the yen and euro.

COMEX gold fell $1.10 to $409 an ounce.