BUZZ-Chipmakers backpedal as US rally falters

** Semiconductor stocks outperformed but lost ground as US stock rally evaporated into losses in late afternoon trading

** Stocks initially surged Tuesday and China-exposed stocks received a further boost following PBOC's move to cut interest rates and RRRs

** Philadelphia SE Semiconductor Index closed down 1.2 pct, in line with the S&P 500 index's 1.4-pct drop

** Atmel Corp easily top SOX performer as its shares had their best day in five years after co confirmed it is exploring strategic alternatives, including a possible sale

** Stocks with large Chinese exposure remained in positive territory. Qorvo Inc (NasdaqGS: QRVO - news) added 2.7 pct, NXP Semiconductors (NasdaqGS: NXPI - news) NV rose 2 pct and Skyworks Solutions Inc (Xetra: AWM.DE - news) clung to a fractional gain, but ARM Holdings PLC (Xetra: ARMA.DE - news) slipped 0.2 pct

** Cavium Inc (NasdaqGS: CAVM - news) and Lam Research Corp only other semis to close higher

** Taiwan Semiconductor Manufacturing Co Ltd shares had risen more than 3 pct but closed flat after co said it would cease making solar modules because sector was not profitable

** Shares (Berlin: DI6.BE - news) of German-based Dialog Semiconductor PLC (Xetra: 927200 - news) closed 6.5-pct higher earlier Tueday amid the Stoxx 600 index's 4.2-pct bounce

** S&P 500 Information Technology Index AAPL.SW - news) surrendered nearly all its earlier gains, closing up just 0.6 pct on the day (RM (LSE: RM.L - news) : lance.tupper.thomsonreuters.com@reuters.net)