US STOCKS-Wall St slips, following global markets

* China stocks lead slide in global equities

* Buffett warns US on side effects of "monetary medicine"

* Goldman Sachs downgrades Alcoa, rates Freeport "buy"

* Indexes down: S&P 0.3 pct, Dow 0.3 pct, Nasdaq 0.4 pct

* For up-to-the-minute market news, click STXNEWS/US

(Updates to mid-morning)

By Edward Krudy

NEW YORK, Aug 19 (Reuters) - U.S. stocks slipped on Wednesday, led by the industrial, materials and financial sectors, as a drop in Chinese shares prompted renewed selling in global equity markets on fears stock prices have outpaced the economic recovery.

China shares slid 4.3 percent, led by recently listed stocks, as nervous investors bailed out on worries the 20 percent slide in just two weeks would deepen. [ID:nHKG105116]

The selling in global equity markets was similar to Monday's sell-off when investors took their cue from trading in Asia, worried that the economic recovery would be slow. Some analysts say U.S. stocks are now set for a pullback, although today's losses fall short of the declines overseas.

"China was supposed to lead us out of our recession and make up for the lack of consumer involvement as far as the U.S. economy," said Alan Lancz, president of Alan B. Lancz & Associates in Toledo, Ohio.

"If they don't grow in v-shaped recovery like investors were discounting over the majority of the summer, it could create a sell-off in stocks and a decline in valuations, even into 2010 and beyond," he said.

The Dow Jones industrial average .DJI fell 26.83 points, or 0.29 percent, at 9,191.11. The Standard & Poor's 500 Index .SPX lost 2.94 points, or 0.30 percent, at 986.73. The Nasdaq Composite Index .IXIC dipped 7.50 points, or 0.38 percent, at 1,948.42.

Goldman Sachs downgraded aluminum giant Alcoa Inc (AA.N) to neutral, citing a lack of upside potential and historic high levels of global aluminum inventories. At the same time Goldman resumed coverage of miner Freeport McMoRan Copper & Gold Inc (FCX.N) with a "buy" rating.

Billionaire investor Warren Buffett, who runs insurance and investment company Berkshire Hathaway Inc (BRKa.N)(BRKb.N), warned that although the United States was on the road to recovery, public debt was becoming unsustainable after government measures to stimulate the economy, which he termed "monetary medicine". [ID:nBNG304124] (Reporting by Edward Krudy; Editing by Padraic Cassidy)