* Investors watch struggling small-cap index
* Deere shares fall after results, Macy's up
* Dow, S&P 500 and Nasdaq all down 0.3 pct (Updates to midday trading)
By Ryan Vlastelica
NEW YORK, May 14 (Reuters) - U.S. stocks edged lower on Wednesday, with the Dow and S&P 500 both coming off their record closing highs, though losses were concentrated in small-cap names.
Major indexes dipped only slightly, but the S&P small-cap index lost 1.1 percent. The Russell 2000 index of small-cap stocks was off 0.7 percent, extending a divergence that has been pronounced throughout 2014. While the S&P is up 2.4 percent on the year, the Russell is down 4.5 percent.
Some analysts are concerned that persistent weakness in small-caps could spread throughout the market.
"From a market perspective, some of the assumptions we had coming into the year, like strengthening growth and improved revenue, haven't come through at the pace we expected, which is why you're seeing a rotation from small growth names into value and defensive ones," said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.
Pursche added that while the S&P's record didn't mean it was overvalued, "a 5-percent correction is always possible."
Deere & Co fell 2.2 percent to $91.56. The farm equipment company cut its full-year sales outlook even as it reported a better-than-expected quarterly profit. Macy's Inc rose 0.4 percent to $58.06 after announcing a dividend increase of 25 percent, but sales were below expectations.
The Dow Jones industrial average was down 56.90 points, or 0.34 percent, at 16,658.54. The Standard & Poor's 500 Index was down 4.68 points, or 0.25 percent, at 1,892.77. The Nasdaq Composite Index was down 12.46 points, or 0.30 percent, at 4,117.70.
The S&P is coming off three straight daily advances, and on Tuesday it climbed above 1,900 for the first time.
Retailer Fossil Group Inc was the biggest decliner on the S&P 500 a day after it gave a second-quarter profit outlook that was much lower than expected, pressured by rising costs. Shares fell 8.1 percent to $102.35.
Sears Holding Corp rose 2.6 percent to $44.36 after the company said it would hire an investment bank to help explore alternatives for its 51 percent stake in Sears Canada .
U.S. producer prices posted their largest increase in 1-1/2 years in April as the cost of food and trade services surged, hinting at some inflation pressures at the factory gate.
While the situation in Ukraine has not been a primary market mover this week, investors continue to watch it closely. On Tuesday, pro-Russian separatists ambushed Ukrainian troops, killing seven in the heaviest loss of life for government forces in a single clash. (Editing by Bernadette Baum; Editing by Nick Zieminski)