April 7 (Bloomberg) -- U.S. stock-index futures dropped, after equities slumped the most in two months, as Internet stocks slipped in early trading and investors awaited this week’s start to the first-quarter corporate-earnings season.
Facebook Inc., Twitter Inc., and Priceline Group Inc. fell in New York. Sprouts Farmers Market Inc. lost 1.9 percent in late April 4 trading as the food retailer recalled its black peppercorns because of possible salmonella contamination.
Futures on the Standard & Poor’s 500 Index expiring in June retreated 0.5 percent to 1,850.5 at 7:23 a.m. in New York. The equity benchmark rose to a record last week before trimming its weekly gain to 0.4 percent in the last two days. The index has climbed 7.1 percent since this year’s low on Feb. 3, taking its advance so far in 2014 to 0.9 percent. Dow Jones Industrial Average contracts dropped 62 points, or 0.4 percent, to 16,294 today.
“There seems to be a lot of profit taking in the technology large caps now,” Heinz-Gerd Sonnenschein, an equity market strategist at Deutsche Postbank AG, said by phone from Bonn, Germany. “It will be an interesting few weeks with the earnings season kicking off tomorrow. Everybody expects a weaker quarter given the headwinds that corporates faced earlier this year. The U.S. market is still strong, not far from a record, but we really need more profit growth to support valuations.”
Alcoa Inc., the largest U.S. aluminum producer, unofficially kicks off the U.S. quarterly earnings season when it releases financial results after the close of trading tomorrow. JPMorgan Chase & Co. and Wells Fargo & Co. are also among the S&P 500-listed companies reporting this week. Profit for members of the gauge probably climbed 1 percent in the period, while sales rose 2.9 percent on average, according to estimates compiled by Bloomberg.
The S&P 500 trades at 15.9 times its members’ projected earnings, more than its five-year average of 14.3 times, data compiled by Bloomberg showed. That’s still lower than the multiple of 16.7 times earnings at the end of last year, which was the highest valuation since 2009.
Facebook, which operates the world’s largest social networking website, lost 1.3 percent to $56. Twitter, the microblogging service that held an initial public offering last year, slipped 0.7 percent to $42.85. Priceline, the biggest U.S. online travel agent, slid 0.9 percent to $1,167 in early trading.
Sprouts slipped 1.9 percent to $36 after the close of regular New York trading last week. The organic grocery chain, which first sold shares to the public in July last year, said routine testing by the U.S. food regulator showed that some of its peppercorns contained salmonella. No illnesses have been reported, Sprouts said in a statement late April 4.