A surge in oil prices and a disappointing earnings report from Morgan Stanley were cited as factors in significant stock market losses Wednesday. All three major indicators recorded their biggest losses since early August.

The increase in oil prices was enough to spur worries that consumer spending could decrease and oil could surpass $50 a barrel.

Morgan Stanley posted a 34 percent drop in third-quarter profit, missing Wall Street forecasts by 17 cents per share. Shares of Morgan Stanley tumbled $3.66, to $48.72.

The Dow Jones industrial average fell 135.75, or 1.3 percent, to 10,109.18, the lowest close for the Dow since Aug. 24.

Broader stock indicators also were substantially lower. The Standard & Poor's 500-stock index was down 15.74, or 1.4 percent, at 1113.56, its lowest close since Sept. 1. The Nasdaq composite index dropped 35.47, or 1.8 percent, to 1885.71, the lowest close for the Nasdaq since Sept. 9.

The run on oil was spurred by a new government report that said the nation's supply of crude fell by 9.1 million barrels last week, compared with a 7.1 million-barrel drop the week before.

Wendy's International slid $2.16, to $33.34, after the fast-food chain cut its 2004 profit forecast because of hurricane damage and a resulting drop in business in Florida, as well as high beef prices. Several Wall Street firms lowered their ratings of Wendy's. The news also sent McDonald's down 76 cents, to $27.01, as investors feared problems similar to Wendy's would plague it as well.

FedEx delivered a strong earnings report, in which the company's profit more than doubled from a year ago, matching Wall Street's estimates. FedEx shares nonetheless fell $3.48, to $85.21, on a modest outlook for the current quarter.

Eastman Kodak reiterated its 2004 earnings guidance, citing strong sales of digital cameras and digital imagery for businesses. Kodak was up 51 cents, at $32.18.

The news that Interstate Bakeries, makers of Wonder Bread and Hostess snacks, was filing for bankruptcy sent the stock plummeting $1.22, to $2.05, before trading on the stock was halted.

Other Indicators

* The New York Stock Exchange composite index fell 84.66, to 6548.56; the American Stock Exchange index fell 7.65, to 1254.68; and the Russell 2000 index of smaller-company stocks fell 11.03, to 565.89.

* Declining issues outnumbered advancing ones by 7 to 3 on the NYSE, where trading volume rose to 1.38 billion shares, from 1.31 billion on Tuesday. On the Nasdaq Stock Market, volume totaled 1.58 billion, up from 1.5 billion.

* The price of the Treasury's 10-year note rose $5.00 per $1,000 invested, and its yield fell to 3.98 percent, from 4.04 percent on Tuesday.

* The dollar rose against the Japanese yen and the euro. In late New York trading, a dollar bought 110.52 yen, up from 109.76 late Tuesday, and a euro bought $1.2262, down from $1.2324.

* Light, sweet crude oil for November delivery settled at $48.35, up $1.59, on the New York Mercantile Exchange.

* Gold for current delivery fell to $407.20 a troy ounce, from $408.30 on Tuesday, on the New York Mercantile Exchange's Commodity Exchange.