US stocks stumbled on Tuesday after Morgan Stanley downgraded the semiconductor sector and a shake-up at two big British banks prompted investors to sell financial shares. Losses were limited as Warren Buffett's Berkshire Hathaway agreed to buy Burlington Northern in a deal that values the railroad company at $34 billion.
Burlington shares surged 28.3 percent to $97.59, boosting the industrial sector nearly 1 percent. Technology stocks led the way down after Morgan Stanley downgraded the sector to "cautious" from "attractive," and cut its view on Intel Corp, saying inventories were beginning to creep up in the sector. The PHLX semiconductor index lost 2.2 percent.
Financials and technology issues had been driving much of the market's recent recovery, and the day's negative developments hurt sentiment. Intel fell 3.1 percent to $18.42. The Dow Jones industrial average fell 70.66 points, or 0.72 percent, to 9,718.78. The Standard & Poor's 500 Index lost 6.56 points, or 0.63 percent, to 1,036.32. The Nasdaq Composite Index dropped 14.37 points, or 0.70 percent, to 2,034.83.
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