Stock proxies slid for a fourth-straight session, but what some feared could turn into a flood of selling proved to be a trickle.

It is unclear what, if any, impact news after the close from IBM ( IBM) will have, but Wednesday's session could be considered a victory for the bulls, as the market closed well off session lows. (Big Blue said it will pay $3 billion this year to close a gap in its pension plan rather than its previous plan of paying $4.5 billion over three years.)

The Dow Jones Industrial Average closed down 0.1% to 8737.71 but well off its intraday low of 8653.38. Similarly, the S&P 500 dipped 0.3% to 917.53 after trading as low as 909.51, while the Nasdaq Composite shed 1.3% to 1430.07 but off its nadir of 1412.90.

Early declines were fostered by a series of negative comments about various technology segments by Morgan Stanley and Deutsche Bank, as well as some less-robust-than-hoped economic data. The government reported factory orders rose 1.5% in October, reversing a 2.3% decline in September but a bit weaker than expected. Elsewhere, the Institute for Supply Management's nonmanufacturing index rose to 57.4 in November, well ahead of expectations, while third-quarter productivity was revised upward to 5.1%.

However, the ISM data and productivity numbers were insufficient to overcome disappointing outlooks from firms such as Hewlett-Packard ( HPQ), Disney ( DIS), Federated ( FD), and J.D. Edwards ( JDEC).

Also contributing to the early losses was the sense of foreboding among traders. As discussed here last night, fears of a steep market decline might have contributed to the market's intraday improvement.

"They set the hook early in the session," said John Bollinger, founder of BollingerBands.com in Manhattan Beach, Calif. "Sentiment is turning negative, and four down days in a row really started to get everybody's attention."

Bollinger focused on the simple fact of the market's string of declines as weighing on sentiment. Other observers noted a spike yesterday in the one-day Arms Index, increases in put buying, as well as notable upticks in the CBOE Market Volatility Index and Nasdaq Volatility Index. On Wednesday, the VIX rose 1.2% to 32.14 and the VXN gained 3% to 53.55. (On the other hand, bullish sentiment rose to 51.1% from 48.3% while bearish sentiment fell to 25% from 25.3% in the most recent Investors' Intelligence survey.

The point being, sentiment had become sufficiently negative to help the market reverse intraday, or at least stem the decline. Bollinger suspects another short-term rally is forthcoming, although a positive close Wednesday, particularly one exceeding Tuesday's intraday highs, would have been a more bullish sign.

Other technical factors cited for the market's afternoon rally included the S&P's ability to hold support at around the 910 level.

"A week from now we could be at 890 but at least for now buyers are showing up where you'd want to see them show up," said Rick Bensignor, chief technical strategist at Morgan Stanley. "I like the market action today -- coming off a lot of weakness and the S&P down just" 3.24 points.

In terms of technical support, Bensignor is focused on the 900 to 915 area for the S&P, suggesting there are "multiple levels of support" within that range, as defined by a variety of technical measurements.

If the 900 level were to break, the index could quickly trade to as low as 870-875, but "I'm still in the bullish camp enough to say the market need not go too much lower," he said. "There's still some bid under the market, but it might not advance much now."

One reason the technician remains in the more optimistic camp is his observation that the S&P 500 has now twice revisited the neckline of its long-term head-and-shoulders pattern at about 950.

After that level broke in July, the index proceeded to swoon to as low as 775 before rallying back to as high as 964.84 on Aug. 22, he recalled. Thereafter, the index tumbled to a new low of 768.67 on Oct. 10, and then rallied to as high as 954.32 on Monday.

"There's no way you should have come back to 950 without thinking there's more upside," Besnignor said, suggesting it'd be "very strange" for that to occur without at least some participants getting caught wrong-footed and looking for a decline.

Finally, upbeat comments about technology stocks from Microsoft ( MSFT) CFO John Connors were cited as another factor in the market's midday revival. Microsoft ended down 0.3% to $56.54 but off its intraday low of $55.82.
Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to Aaron L. Task.