In a change of recent patterns, oil came to the rescue of stocks on Wednesday. Crude's sharp fall helped offset fresh concerns that the economy is slowing, as suggested in an unexpected steep drop in March durable goods orders.

General Electric ( GE - Get Report) CEO Jeff Immelt also helped offset the impact of the durable goods data, saying he still sees the U.S. economy as "pretty strong" and that as far as GE was concerned, orders remained on track for this year.

Crude oil for June delivery fell a whopping 5% in Nymex trading amid rising inventories and presidential pledges to increase refining capacity. Oil, which seems to have stuck to a $50-$55 range for the past few weeks, has had a minimal impact on stocks of late.

But on Wednesday it helped provide an excuse for bottom-fishing and helped put the focus on some of the stocks whose earnings actually met or beat expectations, including Corning ( GLW - Get Report), Boeing ( BA - Get Report), Verizon ( VZ - Get Report) and WellPoint ( WLP).

Still, the recovery by the indices remained unconvincing ahead of Thursday's early reading of the first-quarter GDP. The durable goods data did cast doubt over current growth estimates and also fueled concerns over a slowdown in tech spending.

Nevertheless, the Dow Jones Industrial Average rose 47.67 points, or 0.5%, 10,198.80, the S&P 500 gained 4.64 points, or 0.4% to 1156.38, and the Nasdaq Composite added 2.99 points, or 0.2%, to 1930.43.

Breadth once again showed a lack of conviction on the part of buyers, with advancers barely beating decliners by 17 to 15 on the NYSE, on volume of 1.7 billion shares, while decliners led advancers on the Nasdaq, where 1.8 billion shares traded hands.

The market opened on a downbeat note, with tech stocks leading the way lower after Amazon.com ( AMZN - Get Report) issued a disappointing profit outlook while reporting signs of weakness in international sales. And Internet phone-directory provider InfoSpace ( INSP - Get Report) sank more than 25% after guiding lower its second quarter. Semiconductor issues also were hit after STMicroelectronics ( STM) posted disappointing earnings.

The biggest shocker for the market came on news that durable goods orders fell 2.8% in March vs. expectations for a 0.3% gain. Transportation represented the biggest drop in March's orders, falling 7.8%. But ex-transportation, orders also fell 1% against forecasts of a 0.5% gain.

And the data also contained some bad news for some in the tech sector, as orders for computers dropped 7.8% during the month. While techs later rebounded, the Amex computer hardware index still finished down 0.33%, led by the likes of Apple ( AAPL), Hewlett-Packard ( HPQ), and Gateway

Overall core orders, the capital equipment used by businesses, fell 4.7% in March, marking the steepest fall in capex investment since late 2003.

Interestingly enough, IBM ( IBM - Get Report), which sparked fresh concerns that tech business spending was slowing two weeks ago, moved higher after its chief executive said its earnings shortfall was the result of the company's bad execution.

According to MorningStar technology analyst Rod Bare, IT spending growth is expected to slow to high single-digit percentage growth from the low double-digit growth seen over the past couple of years. But it's part of an expected trend, he says.

"Investors should remember that tech as an industry is moving from growth into maturity," Bare says.

Weak Orders Bite Growth

Of course, the durable goods data had broader and more immediate implications for the economy and markets. Economists on average expect tomorrow's first-quarter GDP to come in at around 3.5%, down from 3.8% in the fourth quarter. Those forecasts already accounted for the bite from the March trade deficit, weak jobs and retail sales.

But after Wednesday's data, whisper numbers circulating around trading desks had the first-quarter GDP possibly coming in below 3%.

Joel Naroff, president of Naroff Economic Advisors, says he is expecting GDP growth of 3.2%-3.3%, a forecast he adopted after the deficit figures. "There is a lot of uncertainty and most of it is about the trade deficit. We're buying a lot of stuff from overseas," he says.

Earlier this year, growth expectations for the first quarter had run as high as 4%.

The bond market rallied after the durable goods data came out while the dollar fell. The benchmark 10-year Treasury note rose 10/32 in price while its yield fell to 4.23% on raised expectations that a slower economy will eventually make the Fed to take its foot off the brake sooner rather than later.

But inflationary pressures are also here, Naroff says, and that's going to keep the Fed raising its fed funds rates to 4.25% by year-end. There is a consensus the Fed will again raise its key rate by 0.25 percentage point to 3% at next week's Federal Open Market Committee meeting.

A weak auction of two-year Treasury notes Wednesday, meanwhile, also showed that while the bond market expects a slowdown, it also anticipates the Fed will keep raising rates in the short term, according to Tony Crescenzi, Miller Tabak fixed-income strategist and RealMoney.com contributor.

In keeping with TSC's editorial policy, Godt doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback.