By RIVA GOLD Updated Oct. 12, 2016 8:39 a.m. ET 1 COMMENTS Stocks tilted lower Wednesday amid lingering concerns about the strength of corporate earnings, while the British pound began to stabilize after sharp swings. Futures pointed to a 0.2% opening loss for the S&P 500, with shares in Europe and Asia under pressure after a downbeat start to the U.S. earnings season sparked a modest selloff Tuesday on Wall Street. Shares of Illumina dropped 25% after the gene-sequencing company cut its revenue guidance, while aluminum giant Alcoa fell around 11% after reporting third-quarter earnings, leaving some investors worried about the rest of the earnings season. In the three quarters in which Alcoa fell more than 10% after its report, the S&P 500 traded down 7.5%, 2.6%, and 6.5% for the remainder of those three earnings seasons, according to Bespoke Investment Group. Overseas, the Stoxx Europe 600 inched down 0.1% in afternoon trade as investors weighed a modest bump in the oil and gas and mining sectors against losses in technology companies. Brent crude oil was up 0.5% at $52.67 a barrel. Europe’s technology sector was down 2.3%, leading declines, after Ericsson AB issued a profit warning for the third quarter, a week after it announced plans to slash almost 20% of its domestic workforce. Shares in the Swedish company fell more than 17%, while Nordic rival Nokia fell 4.6%. In currencies, the British pound was last flat at $1.2244 after four consecutive days of losses. The pound touched a historic low against a basket of currencies Tuesday, according to Bank of England data. It recovered during Asian trading hours, rising more than 1.5% against the dollar, after media reports suggested that U.K. Prime Minister Theresa May had agreed to hold a parliamentary vote on her plans for taking Britain out of the European Union. The U.K. parliament won’t be given a vote on the formal process for withdrawing from the EU, a spokeswoman reiterated Wednesday, after the Labour Party scheduled a parliamentary debate. The pound right now is a barometer of the government’s thinking on its exit negotiations, said Russ Mould, investment director at AJ Bell. “It’s very difficult to know exactly what will come out of government at the moment,� he said. London’s export-heavy FTSE 100 index, which touched its highest level in decades Tuesday, pulled back 0.3% as the British currency recovered. In other currencies, the euro fell 0.4% against the dollar to $1.1016, while the dollar rose 0.4% against the yen to ¥103.8500. The WSJ Dollar index, which measures the dollar against a basket of 16 currencies, was little changed after its biggest daily gain since August. Expectations have grown recently for the U.S. Federal Reserve to raise interest rates at its meeting in December, supporting the dollar. Fed-fund futures, used by investors to bet on central bank policy, currently imply a more than 70% chance of a rate rise by December, according to CME Group. “We’re a market that is run by central banks right now,� said Bret Chesney, portfolio manager at Alpine Global, noting that comments from Fed officials have driven most recent moves in the stock market. Minutes from the Fed’s September meeting are due later Wednesday. Policy makers voted to leave rates unchanged but three officials dissented in favor of an increase, so investors will watch closely for further insight into the debate. In bonds, the yield on the 10-year U.S. Treasury note rose to 1.799% from 1.760% on Tuesday. The gap in yield between the two-year Treasury note, last at 0.891%, and the two-year German note, last at minus 0.657% is around its highest in a decade, according to strategists at Brown Brothers Harriman. The yield on the 10-year U.K. government bond rose to 1.050%. Earlier, shares in Asia mostly followed Wall Street lower as expectations rose grew for a U.S. rate increase in December. Japan’s Nikkei Stock Average fell 1.1% while the Hang Seng Index fell 0.6%. —Hiroyuki Kachi and Matthias Verbergt contributed to this article.

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