US STOCKS-S&P, Nasdaq slip after 2-day run up; energy drops with oil

* Crude down sharply after 4-day rally

* ADP employment falls short of expectations

* Merck (Other OTC: MKGAF - news) down after earnings, Disney climbs

* Indexes: Dow up 0.1 pct, S&P off 0.3 pct, Nasdaq down 0.1 pct (Updates to afternoon)

By Caroline Valetkevitch

NEW YORK, Feb 4 (Reuters) - The S&P 500 and Nasdaq eased on Wednesday in the wake of a two-day rally as energy shares followed oil prices lower and Gilead and other biotech names declined.

Walt Disney kept the Dow in positive territory. Disney shares jumped 8 percent to $101.64 after quarterly profit topped analysts' expectations.

The S&P 500 energy index was off 1.8 percent as oil prices declined after a four-day surge of nearly 20 percent. U.S. crude was down 8.2 percent following a new build in U.S. crude stockpiles.

The day's dip in stocks follows a 2-day gain of 2.8 percent for the S&P 500, driven largely by the jump in energy shares.

"It does seem as if the trading world has focused in on the price of crude oil as being the best barometer of what's going on in terms of economic activity," said Eric Kuby, chief investment officer of North Star Investment Management Corp in Chicago.

Leading biotechnology shares lower was Gilead Sciences (NasdaqGS: GILD - news) , whose stock dropped 7.7 percent to $98.82, a day after the drugmaker said it is offering steeper-than-expected discounts on its hepatitis C drugs to health insurers and other group payers.

The news fueled concerns the sector would face increasing price pressure. The Nasdaq Biotech Index was down 1.5 percent. Gilead was also the biggest drag on the S&P 500 and Nasdaq.

Also in the healthcare space, Merck shares lost 2.8 percent to $59.32 after the drugmaker reported slightly disappointing fourth quarter sales.

At 2:15 p.m., the Dow Jones industrial average rose 22.09 points, or 0.13 percent, to 17,688.49, the S&P 500 lost 6.22 points, or 0.3 percent, to 2,043.81 and the Nasdaq Composite dropped 3.37 points, or 0.07 percent, to 4,724.37.

Shares (Berlin: DI6.BE - news) of cable and telecom operators jumped after Federal Communications Commission Chairman Tom Wheeler, in an op-ed on Wired.com, said he aims to establish the "strongest open Internet protections ever proposed by the FCC" that would apply to both wireless and wired broadband providers. Shares of Comcast were up 3.1 percent at $57.10.

Helping the shares was the regulator's assertion that he would not regulate rates for network operators even under the new rules, said MoffettNathanson analyst Craig Moffett.

Shares of Apple (NasdaqGS: AAPL - news) were up 1.1 percent at $119.95 and its market capitalization topped $700 billion.

On the economic front, U.S. labor market data disappointed. The ADP National Employment Report showed private employers added 213,000 jobs in January, short of the 225,000 estimate.

Declining issues outnumbered advancing ones on the NYSE by 1,967 to 1,083, for a 1.82-to-1 ratio; on the Nasdaq, 1,510 issues fell and 1,185 advanced, for a 1.27-to-1 ratio favoring decliners.

The benchmark S&P 500 was posting 34 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 70 new highs and 27 new lows. (Additonal reporting by Sinead Carew; Editing by Chizu Nomiyama and Nick Zieminski)