Wall Street tumbled Wednesday as investors grappled with renewed worries about the soundness of the financial sector. The major indexes fell more than 2 percent, including the Dow Jones industrial average, which lost more than 230 points.

Many financial services companies logged steep declines during the session, and government-sponsored lenders Freddie Mac and Fannie Mae were among those hardest hit. Analysts said investors are worried that the mortgage finance companies will have to sell more shares than anticipated to compensate for losses from the housing slump.

The Dow fell 236.77, or 2.08 percent, to 11,147.44; the Standard & Poor's 500 index fell 29.01, or 2.28 percent, to 1,244.69; while the Nasdaq composite index fell 59.55, or 2.60 percent, to 2,234.89.

The pullback left both the Dow and S&P 500 back in bear market territory, with both indexes having logged declines of more than 20 percent since their October highs.

McMoRan envisions world's deepest well

McMoRan Exploration Co. and two partners are attempting to drill the world's deepest well.

The South Timbalier 168 prospect in 70 feet of water in the Gulf of Mexico, formerly known as Blackbeard West, may rival the largest discoveries in the deepest parts of the Gulf, said Richard Adkerson, co-chairman of the New Orleans-based company.

Plains Exploration & Production Co. holds a 35 percent stake. Energy XXI (Bermuda) Ltd., backed by hedge-fund manager Stanley Druckenmiller, paid $5.5 million in April for a 20 percent share that could yield reserves valued at $13.7 billion using current prices.

"It's a prospect that has significant potential," Adkerson told Bloomberg News. "That's what we're so excited about."

McMoRan announced plans last month to extend the South Timbalier well to 35,000 feet, which would break the record held by San Ramon, Calif.-based Chevron Corp. for the world's deepest petroleum well.

McMoRan revived the well in March after Exxon Mobil Corp. abandoned it. Exxon Mobil's partner in the project, Newfield Exploration Co., assumed control of the well last year and sold it to McMoRan.

Chesapeake agrees to sell properties

Chesapeake Energy Corp. said Wednesday that it has signed a non- binding agreement to sell its Woodford Shale properties in Oklahoma to an unnamed buyer for between $1.5 billion and $1.75 billion.

The Oklahoma City-based natural gas producer also said it will incur a second-quarter net loss because of hedges against a drop in prices for the commodity. The company did not disclose the financial terms of the loss.

The Woodford Shale properties include about 85,000 acres. Chesapeake said it anticipates the transaction will close in the third quarter, by added that "there can be no assurances that we will reach a definitive agreement with this or any other purchaser."

Shares of Chesapeake fell $3.83, or 6 percent, to $57.72 on the New York Stock Exchange.

Originally published by Bloomberg, AP and staff reports.

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Story Source: Tulsa World