* Obama, Biden, leading legislators to meet at 3 p.m.
* Chicago PMI, pending home sales data on tap
* Futures down: Dow 40 pts, S&P 4.9 pts, Nasdaq 11 pts
NEW YORK, Dec 28 (Reuters) - U.S. stock index futures fell on Friday, putting the benchmark S&P 500 index on track for a fifth straight decline as legislators prepared to resume talks to avoid the "fiscal cliff."
* President Barack Obama and lawmakers are launching a last round of talks before a New Year's cliff deadline, when a series of tax hikes and spending cuts that could send the economy into a recession are set to begin.
* U.S. stocks fell for a fourth straight session on Thursday but managed to to recover most of their earlier losses after the House of Representatives, in the barest sign of progress, said it would return to Washington on Sunday night to work on avoiding the cliff.
* Highlighting market sensitivity to cliff headlines, on Thursday stocks fell more than 1 percent earlier after Senate Majority Harry Reid warned a deal was unlikely before the deadline.
* S&P 500 futures fell 4.9 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 lost 40 points, and Nasdaq 100 futures dropped 11 points.
* Economic data expected on Friday includes Chicago PMI for December at 9:45 a.m. (1445 GMT) while the National Association of Realtors issues Pending Home Sales for November at 10 a.m. (1500 GMT). Economists in a Reuters survey forecast a reading of 51 for the main PMI index and a 1 percent rise in pending home sales.
* European shares edged lower as investors waited to see if a deal to avoid the U.S. "fiscal cliff" would be reached before further boosting their exposure to equities.
* The yen fell to its lowest level in more than two years, lifting Japanese stocks to 21-month highs on expectations of drastic monetary easing, while shares in the rest of Asia rose as Washington races to avoid a fiscal crisis.