An analyst downgrade of the semiconductor sector sent technology shares lower Monday, 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 was due to release its earnings.

While some analysts still expect a strong second quarter, investors were concerned by the continuing stream of earnings warnings and analyst downgrades. However, most of the bearish news was confined to the technology sector, and earnings from banking companies brought large-cap stocks higher.

"The market isn't really responding to good earnings," said Todd Leone, managing director of equity trading at SG Cowen Securities. "Expectations have been lowered, so I suppose there's a chance we can see a little bit of a rally as earnings season moves forward, but I really don't know what to expect."

The Dow Jones industrial average gained 25.00, or 0.2 percent, to 10,238.22. The technology-focused Nasdaq composite index fell 9.41, or 0.5 percent, to 1936.92, while the Standard & Poor's 500-stock index rose 1.54, or 0.1 percent, to 1114.35.

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

The semiconductor downgrades weighed on the entire technology sector. Intel slipped 33 cents, to $26.24, while Novellus Systems 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 beat expectations by 3 cents per share. SunTrust gained $1.62, to $66.00. M&T Bank surged $3.70, to $91.60, after it beat Wall Street expectations by 8 cents per share.

NCR, maker of ATM machines and barcode scanners, said its second-quarter earnings could come in as high as 35 cents per share. Analysts had been expecting 18 cents per share. NCR rose $4.79, to $51.81.

Morgan Stanley gained 34 cents, to $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 favor of less-qualified men.

Other Indicators

* The New York Stock Exchange composite index rose 3.38, to 6503.78; the American Stock Exchange index fell 1.48, to 1259.68; and the Russell 2000 index of smaller-company stocks fell 1.49, to 562.24.

* Advancing issues outnumbered declining ones by 4 to 3 on the NYSE, where trading volume fell to 1.11 billion shares, from 1.18 billion on Friday. On the Nasdaq Stock Market, decliners outnumbered advancers by 7 to 5 and volume totaled 1.49 billion, up from 1.37 billion.

* The price of the Treasury's 10-year note rose $1.25 per $1,000 invested, and its yield fell to 4.45 percent, from 4.46 percent on Friday.

* The dollar fell against the Japanese yen and rose against the euro. In late New York trading, a dollar bought 108.23 yen, down from 108.24 late Friday, and a euro bought $1.2404, down from $1.2408.

* Light, sweet crude oil for August delivery settled at $39.50, down 46 cents, on the New York Mercantile Exchange.

* Gold for current delivery rose to $408.10 a troy ounce, from $407.50 on Friday, on the New York Mercantile Exchange's Commodity Exchange.