* Deere falls on after earnings, outlook
* Empire State contracts to lowest level in four months
* PPI shows weak inflation pressure
* Futures off: Dow 17 pts, S&P off 3.3 pts, Nasdaq off 3.75 pts
By Chuck Mikolajczak
NEW YORK, May 15 (Reuters) - U.S. stocks were set to dip at the open on Wednesday, indicating the S&P 500 may ease from its most recent record high after weaker-than-expected manufacturing data.
Data showed activity in New York state's manufacturing sector unexpectedly contracted to its lowest level in four months, falling to minus 1.43 from 3.05 in April, and below expectations for an increase to 4.
But a separate report showed producer prices recorded their largest drop in three years in April, falling by a seasonally adjusted 0.7 percent last month, its biggest decline since February 2010, which should enable the Federal Reserve to maintain its accommodative monetary policy.
"Empire (State general business conditions index data) is bad and that is consistent with what we have been seeing at the national level and the regional level," said Phil Orlando, chief equity market strategist, at Federated Investors in New York.
"Could that number spark some profit taking today? Absolutely. The bigger question is what is the longer term picture? The direction for the market is up."
Both the Dow Jones Industrial Average and the S&P 500 rallied to a fresh record high on Tuesday, buoyed by gains in large-cap shares, on investor expectations central bank stimulus measures will continue to support further equity market gains.
The S&P 500 is up 15.7 percent for the year, while the Dow has jumped 16.1 percent.
S&P 500 futures slipped 3.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 17 points, and Nasdaq 100 futures shed 3.75 point.
Investors will eye housing data at 10:00 a.m. EDT (1400 GMT) for signs of continued improvement, with the release of the National Association of Home Builders/Wells Fargo housing market index for May. Economists in a Reuters survey expect a reading of 43 versus 42 in April.
An improving housing market has been seen as a tailwind to the economic recovery.
Deere & Co fell 3.8 percent to $90.22 in premarket trading after the agricultural equipment maker reported higher quarterly earnings and forecast a record profit for the full year, but warned "global financial pressures as well as adverse weather patterns" made it cautious about its outlook.
SunPower Corp shares jumped 8 percent to $20.55 before the opening bell after the maker of solar panels and solar power plants it expects to post an adjusted profit for the current quarter.
U.S.-listed shares of Research in Motion shed 2.2 percent to $14.91 in premarket trading after Bernstein cut its rating on the Blackberry maker to "market perform."