A downgrade of the computer chip industry by Merrill Lynch hurt Canadian markets and the technology-focused Nasdaq Composite index Monday.

The S&P/TSX Composite Index fell 50.95 points or 0.60% to 8422.23. The TSX Venture Exchange also finished on a down note, dropping 5.93 or 0.37% to 1577.04.

In New York, the Nasdaq lost 9.41, or 0.48%, to 1936.92. The Dow Jones industrials average, despite being down 40 points at midday, rebounded to close up 25 points or 24%, to 10238.22. The S&P 500 climbed 1.54, or 0.14% to 1,114.35.

Merrill cut its rating on the chip sector from “overweight” to “underweight,” citing lower-than-expected demand for both personal computers and corporate hardware. The firm also downgraded Intel Corp. The chipmaker is due to release its earnings reportTuesday.

Eleven of the TSX’s 13 sub-indices ended in the red including the financial sub-index, which lost 0.26%. Information technology stocks plummeted 2.19%. Only the telecommunications and utilities sub-indices ended up.

The Canadian dollar closed at US75.85¢, off slightly from US75.86¢ on Friday.