Gilead Sciences Inc. retreated 7.7% after saying discounts for its blockbuster hepatitis C drugs will weigh on revenue this year. Merck & Co. fell 2.1% after saying 2015 adjusted earnings and sales will be below analyst estimates. EOG Resources Inc. paced declines among energy shares as crude lost more than 4% after its biggest four-day rally since 2009.
Contracts on the Standard & Poor’s 500 Index expiring in March slid 0.5% to 2,032.30 at 9:12 a.m. in New York. The gauge rallied 2.8% in the past two days, helped by a surge in energy stocks, and closed 1.9% away from a record high. Dow Jones Industrial Average futures slipped 49 points, or 0.3%, to 17,523 on Wednesday.
“Volatility in equities has been higher -- the Greek elections, Swiss National Bank and oil have all contributed to that,” Ian Williams, a market strategist at Peel Hunt LLP in London, said by telephone. “The S&P 500’s valuation is at the high end of its recent range. There’s a recognition most of the good news in terms of the earnings outlook might be priced in.”
The S&P 500 trades at 17.1 times estimated profit, near the 17.5 times reached in December, data compiled by Bloomberg show.
Investors will get cues on the health of the U.S. economy today. An ADP Research Institute report showed companies added 213,000 workers in January, below economists’ forecast of 223,000. The data comes before Friday’s jobs report from the Labor Department, which economists predict will show nonfarm payrolls increased 231,000 last month, while the unemployment rate remained at 5.6%.
Another release on Wednesday will probably indicate that the Institute for Supply Management’s non-manufacturing index slipped to 56.4 in January from a reading of 56.5 in December.
The rebound in the last two days trimmed the S&P 500’s drop to 0.4% for 2015. In January, the index posted its worst month in a year as concern mounted that slowing growth overseas will hurt the American economy, while the plunge in crude oil and stronger dollar have shown signs of eroding corporate profits. To add to the volatility, the Swiss National Bank said it would abandon its cap against the euro, roiling markets globally.
The political situation in Greece continues to bring concerns as anti-austerity party Syriza is negotiating new terms on repaying its debt. Demand slumped to a more than eight-year low at a sale of Greek Treasury bills on Wednesday.
Futures pared a decline earlier as China cut the amount of cash lenders must set aside as reserves.
Investors have also been scrutinizing corporate earnings. About 78% of S&P 500 companies that have posted results this season have beaten analyst estimates, while 54% have topped sales projections, data compiled by Bloomberg show.
Yum! Brands Inc. and 21st Century Fox Inc. are among 29 S&P 500 companies reporting earnings on Wednesday.
Among other companies moving on earnings, Chipotle Mexican Grill lost 6.4% after posting fourth-quarter same-store sales that trailed analysts’ estimates and saying that higher food costs slowed profit gains.
General Motors Co. climbed 3.8% after reporting quarterly profit that beat projections and raising its dividend.
Walt Disney Co. rallied 4.4% and Whirlpool Corp. gained 2.5% after the companies posted quarterly earnings and revenue that beat projections.
Staples Inc. slipped 6.9% after agreeing to buy Office Depot Inc. for about $11 a share. The stocks jumped on Tuesday after the two retailers were said to enter merger talks.