US STOCKS-Wall St set to fall as China selling weighs

* China stocks lead correction in global equities

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

* Goldman Sachs downgrades Alcoa, rates Freeport "buy"

* Futures down: S&P 11.1 pts, Dow 86 pts, Nasdaq 19.5 pts

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By Edward Krudy

NEW YORK, Aug 19 (Reuters) - U.S. stock index futures pointed to a fall of about 1 percent at the open on Wednesday 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, shrugging off official efforts to talk up the market. [ID:nHKG105116]

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

"If China all of a sudden is going to have a pullback because they're worried about the pace of economic stimulus not being sustained in the second half of the year, it would be a little arrogant for us to think that we can keep on going, and obviously Monday was a wake-up call," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

Boockvar said that while U.S. stocks have probably started to pull back after a near-50 percent run-up since early March, the correction is unlikely to be as great as in China, where stocks had rallied even further. He also pointed out the move on Wall Street has been in low-volume trade during the traditional holiday month of August.

S&P 500 futures SPc1 fell 11.2 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 DJc1 fell 86 points, and Nasdaq 100 futures NDc1 fell 19.5 points.

Adding to the gloom, 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]

In other signs the recovery may be slow, Hewlett-Packard Co (HPQ.N) warned about demand from businesses after narrowly beating analysts estimates after the bell on Tuesday, while agricultural equipment maker Deere & Co (DE.N), which posted better-than-expected earnings before the bell, said it expected to barely break even in the fourth quarter. [ID:nN17257591] and [ID:nN18439102]

Hewlett-Packard shares fell 2.5 percent to $42.86 before the bell, while Deere lost 3.5 percent to $43.50.

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.

Alcoa's shares fell 3.8 percent to $12.43 in premarket trade, while Freeport McMoRan fell 2 percent to $59.20. Commodity related stocks have been among the most sensitive to fears of economic weakness. (Reporting by Edward Krudy; Editing by Padraic Cassidy)