US stocks end mixed

A downgrade of the semiconductor sector sent technology shares lower on Wall Street today, but the overall stock market ended mixed as large-caps benefited from a late-day rally.

Merrill Lynch cut its rating on the entire sector from ”overweight” to “underweight”, citing lower-than-expected demand for both personal computers and corporate hardware. The firm also downgraded Intel a day before it is due to release its earnings.

The Dow Jones industrial average gained 25.00, or 0.2%, to close at 10,238.22 after drifting in negative territory most of the day. The Dow finished higher for the second straight session.

Broader stock indicators were mixed. The technology-focused Nasdaq composite index fell 9.41, or 0.5%, to 1,936.92, while the Standard & Poor’s 500 index was up 1.53, or 0.1%, to 1,114.34. The Nasdaq has shed 5.4% of its value this month.

Trading was light in advance of major earnings reports later in the week, including announcements from Intel, Apple Computer Inc., Johnson & Johnson Co and Bank of America.

The downgrades in semiconductors weighed on the entire technology sector. Intel slipped 33 cents to 26.24, while Novellus Systems, a microprocessor equipment provider, fell 1.33 to 29.72 despite beating Wall Street estimates by 3 cents per share.

The banking sector had a strong showing in its first earnings reports of the quarter. SunTrust Banks also beat expectations by 3 cents per share on gains in its investment, mortgage and wealth management businesses. SunTrust gained 1.62 to 66.00. M&T Bank surged 3.70 to 91.60 after it too beat Wall Street expectations by 8 cents per share.

NCR, maker of ATM machines and barcode scanners, provided a rare positive outlook, saying its second quarter earnings could come in as high as 35 cents per share. Analysts had been expecting 18 cents per share. NCR was up 4.79 at 51.81.

Morgan Stanley was up 34 cents at 50.34 after settling a high-profile sexual discrimination lawsuit for 54 million. The Equal Opportunity Employment Commission had accused the investment bank of denying promotions to women in favour of less qualified men.

Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume was very light.

The Russell 2000 index of smaller companies was down 1.67, or 0.3%, at 562.06.