US STOCKS-Wall St drops on Bernanke comments, chip makers

(Updates to early afternoon)

By Jennifer Coogan

NEW YORK, Feb 14 (Reuters) - U.S. stocks fell on Thursday after Federal Reserve chief Ben Bernanke said he saw sluggish economic growth ahead and unfavorable brokerage reports on two semiconductor makers sparked a sell-off in technology shares.

Goldman Sachs removed Intel Corp (INTC.O: Quote, Profile, Research), the world's largest chip maker, off its list of top picks, while two brokerages cut their price targets on graphics chip maker Nvidia Corp (NVDA.O: Quote, Profile, Research).

Bernanke also said he sees investment banks taking more write-downs on losses from subprime mortgages, dragging on financial shares and pushing the S&P financial index down 1.3 percent.

He said the central bank will act as needed to help the struggling U.S. economy, but said the Fed believes growth should pick up later in the year.

"It doesn't seem to be a very inspired commentary. He hasn't hinted anything about rate cuts. The fact he hadn't may be giving people pause," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland.

The Dow Jones industrial average .DJI was down 104.13 points, or 0.83 percent, at 12,448.11. The Standard & Poor's 500 Index .SPX was down 10.04 points, or 0.73 percent, at 1,357.17. The Nasdaq Composite Index .IXIC was down 22.35 points, or 0.94 percent, at 2,351.58.

Intel shares fell 2.7 percent to $20.64, while Nvidia tumbled 12.8 percent to $23.56. The Philadelphia Stock Exchange semiconductor index fell 1.5 percent.