* Movement in fiscal cliff negotiations begins
* Apple falls as Citigroup cuts rating for iPhone maker
* Futures: S&P up 1.6 pts, Dow up 19 pts, Nasdaq down 4.5 pts
By Leah Schnurr
NEW YORK, Dec 17 (Reuters) - U.S. stock index futures were mixed on Monday as investors were encouraged by signs of movement on "fiscal cliff" negotiations over the weekend, but Apple was likely to weigh on the market.
Republican House Speaker John Boehner edged slightly closer to President Barack Obama's key demands as they try to avert the tax hikes and spending cuts that are set to take effect in the new year.
Sources familiar with the talks confirmed that Boehner proposed extending low tax rates for everyone who has earned less than $1 million, and rates would rise for wages above that. But Boehner's new positions were still far from those held by Obama.
"It does solidify that a deal is very close and it could be announced by the end of this week," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "We could be surprised. We could actually have a Santa gift that a deal has been reached."
Investors will get a report on manufacturing in the New York region at 8:30 a.m. (1330 GMT). The pace of activity is expected to have improved in December but still show a contraction.
Uncertainty over when and if a federal budget deal will be done has kept investors cautious in what is normally a quiet trading period heading into year-end.
Investors are worried the economy could slide back into recession if the full brunt of the tax and spending changes is allowed, though most expect a deal will eventually be reached.
Apple Inc was down 1.5 percent at $502.35 in premarket trading as Citigroup cut its rating to 'neutral' from 'buy' and slashed its price target to $575 from $675. The stock had earlier been indicated to open below $500, which would be the first time since February.
Apple shares have tumbled nearly 30 percent in about three months, losing 3.8 percent on Friday alone, helping lead the overall market lower.
The tech giant said it sold more than 2 million of its new iPhone 5 smartphones in China during the three days after its launch there on Friday, but the figures did not ease worries about stiffer competition.
S&P 500 futures rose 1.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures added 19 points but Nasdaq 100 futures fell 4.5 points.
Sprint Nextel Corp raised its offer for Clearwire Corp by 7 cents per share to buy the rest of the wireless service provider for $2.2 billion. Clearwire tumbled 9.2 percent to $3.06, while Sprint was up 1.4 percent at $5.63 in light volume.
American International Group Inc may raise as much as $6.5 billion from the sale of its remaining stake in AIA Group Ltd, exiting a business the U.S. insurer started nearly 100 years ago. AIG was up 1.9 percent at $34.59.
Networking equipment company Cisco Systems Inc has hired Barclays to sell its Linksys home router unit, a report said on Sunday.