NEW YORK (The Street) -- U.S. stock futures were marginally lower Wednesday after markets posted two days of record highs. A strong result for producer prices showed the threat of deflation fading as the U.S. economy recovers.

Futures for the Dow Jones Industrial Average were falling 5.44 below fair value to 16,666 while futures for the S&P 500 were off 1.40 below fair value to 1,892.25. Nasdaq futures were off 4.23 below fair value to 3,604.5.

  • The producer price index rose 0.6% in April - the most in over a year - after an increase of 0.5% in March. Expectations were for a 0.2% result. The higher PPI shows the prospect of deflation fading as the economy improves. 
  • Stocks expected to see price actionWednesday include Kate Spade (KATE) , Macy's (M) - Get Report and Cisco(CSCO) - Get Report. Kate Spade posted a profit of $46.2 million or 37 cents a share, against a loss of $52.2 million or 44 cents a share a year earlier. Macy's shares were rising 1.24% in premarket trading after it reported a 9% increase in profit for the first quarter and increased its dividend by 25%. Cisco Systems is expected by Wall Street to report third-quarter earnings of 48 cents a share. Cisco reports after Wednesday's closing bell. Deere(DE) - Get Report said fiscal second-quarter earnings fell 9.5% on lower demand for farming equipment. Sears (SHLD) said Wednesday it is considering selling its Canadian operations, and is looking at strategic options for its 51% in Sears Canada
  • In international markets, Germany's DAX was falling 0.18% while the U.K. FTSE was 0.17% lower. The Hang Seng closed up 1.03% while the Nikkei was 0.14% lower.
  • The U.K. jobless rate dropped to a five-year low of 6.8% in the three months to March, down from 6.9% in February. The Bank of England said that solid performance in the U.K. economy continued but more spare capacity needed to be absorbed before it would consider raising interest rates. Industrial production across the eurozone fell in March, down 0.3% from February and 0.1% from a year earlier.
  • In the U.S., regulators are reconsidering their approach to mortgage lending amid concern that tight standards could hamper a housing recovery.
  • In latest Ukraine crisis developments, Russia will deny the U.S. use of the International Space Station after 2020 and stop export of rocket engines to the U.S.
  • Markets closed mixed Tuesday, with the the S&P 500 and Dow hitting record highs while the Nasdaq finished lower. The S&P touched 1,900 for the first time during the session but failed to hold this level through to the close. 

-- By Jane Searle in New York