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Investors didn't like what they saw after Morgan Stanley and FedEx Corp. reported their quarterly earnings on Wednesday morning, and who could blame them?

In the case of FedEx, the package shipping company reflected all that's wrong with the world these days: Soaring fuel costs and a slow economy (okay, along with a big one-time charge) translated into fiscal fourth-quarter earnings that slipped to a loss of $241-million (U.S.), or 78 cents a share.

Just as bad, the company sliced its earnings expectations for the first quarter to a range between 80 cents and $1 a share, far below expectations for earnings of $1.34 a share. Its shares fell to $80.45 in premarket trading, down $3.88.

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In the case of Morgan Stanley, the securities firm reported that its earnings fell 57 per cent in the second quarter, to 95 cents a share. While that is slightly ahead of analyst expectations for 92 cents a share in earnings, investors were wary. The shares fell to $38.92, down $1.67 in premarket trading.

Stock index futures were down with about an hour before markets open, suggesting indexes will open lower. Futures for the Dow Jones industrial average fell 81 points, to 12,092. Futures for the broader S&P 500 fell 10 points, to 1343.

In Europe, the U.K.'s FTSE 100 fell 1.7 per cent and Germany's DAX index fell 0.9 per cent in afternoon trading there. In Asia, Japan's Nikkei 225 rose 0.7 per cent in overnight trading and China's Shanghai stock exchange composite index showed rare signs of life, popping 5.2 per cent.

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