* Morgan Stanley downgrades semis, Intel falls * Berkshire bid for Burlington Northern boosts industrials * Dow off 0.1 pct, S&P up 0.4 pct, Nasdaq up 0.2 pct * For up-to-the-minute market news, click [STXNEWS/US] (Updates to afternoon, changes byline)

By Caroline Valetkevitch

NEW YORK, Nov 3 (Reuters) - The Dow dipped while the S&P 500 and Nasdaq rose slightly on Tuesday as a Morgan Stanley downgrade of semiconductors weighed on the sector, while deal news bolstered views that merger actvity was picking up.

Warren Buffett's Berkshire Hathaway (BRKa.N: Quote, Profile, Research) agreed to buy Burlington Northern Santa Fe Corp (BNI.N: Quote, Profile, Research)in a deal that values the railroad company at $34 billion. Late Monday, Stanley Works Inc (SWK.N: Quote, Profile, Research) said it struck a deal to buy Black & Decker Corp (BDK.N: Quote, Profile, Research).

Technology stocks ranked among the major decliners after Morgan Stanley downgraded the sector to "cautious" from "attractive," and cut its view on Intel Corp (INTC.O: Quote, Profile, Research), saying inventories were beginning to creep up in the sector. The PHLX semiconductor index lost 1.5 percent. [ID:nBNG421836]

"The downgrade of Intel was the major dampening effect," said Jim Awad, managing director at Zephyr Management in New York.

"The broader issue that that brings up is: Has the stock market gotten ahhead of the economy? Business is not as strong as the stock market might indicate. That's giving the market some pause," he added, in spite of "the good news on Warren Buffett."

The Dow Jones industrial average .DJI was down 8.69 points, or 0.09 percent, at 9,780.75. The Standard & Poor's 500 Index .SPX was up 2.89 points, or 0.38 percent, at 1,045.77. The Nasdaq Composite Index .IXIC was up 3.49 points, or 0.17 percent, at 2,052.69.

Shares of Intel slid 2.7 percent to $18.49.