By Rex Crum

Technology stocks put in another disappointing trading session Tuesday as early gains from the semiconductor stocks crumbled and the rest of the sector slumped to close in the red due to concerns about earnings reports set to begin next week.

The retreat was broad-based, as the tech-heavy Nasdaq Composite Index (RIXF) fell more than 41 points, or 2.3%, to close at 1,746, the Philadelphia Semiconductor Index (SOX) gave up almost 3% and the Morgan Stanley High Tech 35 Index (MSH) shed 2.5%.

Losses overtook the market in late morning due to more uncertainty about what the next round of earnings reports might look like. Among bellwether tech stocks, Intel Corp. (INTC) and IBM Corp. (IBM) are set to report quarterly results next week.

IBM shares fell $1.46 Tuesday to close at $100.19. Other declines came from Dell Inc. (DELL), Oracle Corp. (ORCL), EMC Corp. (EMC), Cisco Systems Inc. (CSCO), Microsoft Corp. (MSFT), Google Inc. (GOOG) and Apple Inc. (AAPL).

Hewlett-Packard Co. (HPQ) shares fell 89 cents to $36.84. The company is banking on new Web-connected printers and other initiatives to spur sales in its imaging and printing business.

Chip stocks initially showed a few signs of life, but the early upbeat reaction after a slate of ratings upgrades by Bank of America/Merrill Lynch analyst Sumit Dhanda passed as much of the sector ended the day in negative territory.

Dhanda raised his ratings on Intel (INTC), LSI Corp, (LSI), Marvell Technology Group Ltd. (MRVL), Maxim Integrated Products Inc. (MXIM) and National Semiconductor Corp. (NSM).

Dhanda lifted his take on Intel and Marvell to buy from neutral, raised his rating on Maxim and National Semi to neutral from underperform and raised his rating on LSI to buy from underperform. In a research note, Dhanda said he made the moves following "favorable indications" in the chip demand and purchasing cycle.

"Recent macro data suggests definitive signs of a turn in end demand have begun to emerge, thus warranting a more constructive stance on the [semiconductor] group," Dhanda said.

Following Dhanda's upgrades, Intel fell 29 cents a share to $16.25; LSI rose 10 cents to $4.65 a share and Marvell rose 10 cents a share to $11.50. Maxim fell 30 cents a share to $15.41 and National Semi shares gave up 26 cents to end the day at $12.01.