(Bloomberg) -- U.S. index futures dropped, after the Bank of Japan unexpectedly refrained from adding to stimulus measures, signaling equities will slide for the first time in three days.

Standard & Poor’s 500 Index contracts expiring in June declined 0.8 percent to 2,075 at 11:02 a.m. in London, falling sharply after the BOJ statement. Dow Jones Industrial Average futures erased 136 points, or 0.8 percent, to 17,827. Shares climbed for a second day on Wednesday, coming close to their highest level of the year, after the Federal Reserve reassured investors by signaling interest-rate increases will be gradual.

“The BOJ was disappointing, and investors are now once again unsure about the general development in equity markets,” said Christoph Riniker, the Zurich-based head of strategy research at Julius Baer Group Ltd., which oversees 300 billion Swiss francs ($310 billion). “Any negative developments are going to put pressure and hurt the sentiment. The rally happened mainly because of investors who didn’t know what to do with the money, rather than strong fundamentals, and the market is not cheap.”

The S&P 500 has rebounded as much as 15 percent from its February low, taking its valuation to 17 times estimated profits, near last year’s high. The Fed kept its benchmark interest rate unchanged on Wednesday, saying it will monitor economic developments amid slow but steady growth. Data due at 8:30 Washington time is forecast to show the nation’s expansion weakened to 0.6 percent in the first quarter from 1.4 percent in the three months before. Traders are now pricing in a more than 50 percent chance of a Fed rate increase in November. Inc., United Parcel Service Inc. and Time Warner Cable Inc. are among 63 S&P 500 companies reporting earnings on Thursday. Analysts expect a 9.2 percent decline in first-quarter profit for firms in the gauge, the worst performance since the financial crisis. Of those that have released results so far, 81 percent beat profit projections, while 60 percent topped sales estimates.

Among companies moving in early New York trading, Facebook Inc. surged 8.5 percent after reporting sales and profit that blew past analysts’ estimates as businesses spent more in video ads on its main mobile app. Medivation Inc. rose 2.3 percent after Sanofi made an unsolicited offer to buy the U.S. drugmaker for about $9.3 billion in cash. Hanesbrands Inc. advanced 1.3 percent after the clothing manufacturer agreed to buy Australia’s Pacific Brands Ltd. for A$1.1 billion ($835 million), gaining iconic underwear labels including Bonds and Jockey.

To contact the reporter on this story: Roxana Zega in Zurich at To contact the editors responsible for this story: Cecile Vannucci at

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