US shares fail to recover from oil supply glut news

(MENAFN- ProactiveInvestors)US shares never recovered from oil prices dropping below $40 after news of a fresh supply glut on Wednesday and closed firmly in the red. The S&P500 index never once traded above Tuesday's closing levels and ended the latest session down 0.64% at 2036 around a one-week low. The effect in the mid-cap and small-cap sectors was more pronounced on the downside. The S&P Midcap 400 ended down 1.25% at 1412 while the S&P Smallcap 600 finished down 1.65% at 663. The wider small-cap Russell 2000 index closed down a hefty 2% at 1075. The US oil benchmark West Texas Intermediate was down 4% at $39.83 - driven there by news that last week's US oil inventories were three times estimates and further fueled despair about the global supply glut. Mid-session US stocks remained downbeat at midsession on Wednesday after US oil stockpiles were reported three times forecasts and sent oil prices down to within a whisker of $40 a barrel. The broad S&P500 was down 0.4% at 2041 led by a drop of 9.6% to $9.93 by natural resource company Freeport-McMoRan (NYSE:FCX) and 9.3% to $4.37 by Chesapeake Energy (NYSE:CHK). Chesapeake was responding to the move in oil prices but Freeport felt downside after broker Deutsche Bank released an update on the stock and recommended a 'Hold' rating on shares of Freeport-McMoRan with a price target of $9. The S&P Midcap 400 was down 0.6% at 1420 and underperforming the S&P500. The mid-caps fallers were led by SunEdison (NYSE:SUNE) down 12% at $1.30 on further bankruptcy concerns. Debtwire reported on Tuesday that SunEdisdon was in talks with holders of $725mln in second-lien loans to fund a debtor-in-possession facility - typically an action before a bankruptcy. The S&P Smallcap 600 was down 0.8% at 669 with Stone Enery (NYSE:SGY) leading the losses with a 18% drop to $1.14. Similarly the small-cap Russell 2000 index was down 1.2% at 1084. The US oil benchmark the West Texas Intermediate was down 3.2% at $40.12 after news that US official inventories jumped last week fuelling the supply glut. Open Stocks have opened on the back foot with the bears deriving encouragement from the slide in crude oil prices. The Energy Information Administration disclosed that oil inventories rose by 9.4mln last week to 432.5mln barrels which is a record level. Industry analysts had expected a rise of around 3.1mln barrels. The S&P 500 was off 0.4% at 2042 while the mid-cap measure the S&P 400 gave up 0.8% at 1418. At the small-cap end of the market the damage was deeper still with the Russell 2000 off 1.1% at 1086. Great Basic Scientific Inc (NASDAQ:GBSN) defied the trend in convincing fashion storming almost 70% higher to 24.7 cents as the molecular diagnostics company said it had received clearance from the Food & Drug Administration for its Shiga Toxin Direct Test. In contrast Superconductor Technologies Inc (NASDAQ:SCON) plunged 22% to 21 cents after fourth quarter results. The net loss for 2015 was $8.6 million or $0.44 per share versus a loss the year before of $8.3mln or 64 cents a share.