The US Nasdaq market lost 3.4 per cent of its value last night as broker downgrades affected two semiconductor groups and dragged sentiment down across the market.

The decision by brokers to reduce the ratings for Xilinx and Altera saw both lead the technology-laden market down to levels not seen since the latter part of May. The Nasdaq has now fallen 23 per cent since the end of August.

The two downgrading of the semiconductor firms, despite impending quarterly results that are expected to beat forecasts, came as fears grew for the medium-term health of the market for general computer chips. The regradings saw Xilinx shed 21 per cent of its value on the session and Altera 27 per cent. Intel, the world's largest semiconductor firm which employs 4,500 people in Leixlip, Co Kildare, saw its stock fall last month, when it issued a revenue warning.