Rising bond yields and another pullback in energy shares were too much for the stock market to overcome Wednesday. And while most actual earnings reports have at least been in line with expectations, disappointing guidance has failed to revive leadership in key sectors, most notably tech.

The Nasdaq Composite finished with a loss of 9.40 points, or 0.45%, at 2100.05, weighed down by disappointing sales guidance from online retailer Amazon.com ( AMZN) yesterday. (Shares of Amylin ( AMLN) and Biogen Idec ( BIIB) were down sharply in after-hours trading after both biotechs reported disappointing results.)

Meanwhile, the Dow Jones Industrial Average finished down 32.89 points, or 0.32%, at 10,344.98. The blue-chip average was under pressure from weakness in Boeing ( BA), whose earnings disappointed, and Exxon Mobil ( XOM) which tracked crude prices.

Crude slid $1.78 to $60.66 per barrel following a bearish inventory report, erasing most of a $2 rally on Tuesday.

The S&P 500 dropped 5.16 points, or 0.43%, to 1191.38. Technical traders noted that the S&P pulled back after failing to convincingly breach its 200-day moving average at 1199. The broad average retreated after touching an intraday high of 1204.

Adding pressure on the stock market was a continued surge in bond yields , which have broken through previous resistance levels amid rising inflation expectations. The benchmark 10-year Treasury bond fell 14/32 while its yield, which moves inversely, rose to 4.59%, its highest level since March.

The stock market, meanwhile, is giving headaches to market strategists, who are paid to make sense of it and position their firms' money to profit from it. Technically, many trend-watchers believe the market has been oversold for more than a week and a half now. While there have been sharp gains since, they've been met with quick reversals.

One reason for this has been earnings, says Chris Johnson, market strategist at Schaeffer's Investment Research. While a majority of companies reporting so far have either met or beat expectations, there have been high-profile disappointments in forward guidance.

"Investors have been trying to discount what is going to happen to profits over the next three to six months out. And so far it's not pretty," Johnson says. "Even though the market's had this technical wind at its back for a while, this lack of outlook, this uncertainty is causing the market to stall."

Unfortunately, this uncertainty has been particularly hard for bellwether sectors of the market, such as semiconductors. Disappointing guidance at Intel ( INTC) last week and Texas Instruments ( TXN) Tuesday have shaken investors' confidence about the semiconductor sector's ability to lead the broad market higher. (After the bell, LSI Logic ( LSI) forecast fourth-quarter earnings and revenue below analysts' expectations, sending its shares down as well in after-hours trading.)

Semiconductor stocks traditionally perform well around the end of the year, due to strong chip demand from computer and video-game stations manufacturers ahead of the holiday shopping season. The Philadelphia Semiconductor Index, however, has been unable to rally so far.

Other tech leaders, such as online retailers eBay ( EBAY) last week and Amazon.com Tuesday night, also painted a bleak picture of the outlook for consumer spending for the end of the year.

And it's not as if investors are pouring money into defensive sectors, such as pharmaceuticals, either. Last week, Pfizer ( PFE) got pummeled after cutting its earnings guidance and so far bargain-hunters haven't yet shown interest in picking up the pieces. On Wednesday, the pharmaceutical giant fell another 0.7%.

Pfizer "is a great example of what's going on in this market," says Johnson. "Investors are expecting some kind of upside, but they are uncommitted. Institutional investors and Main Street don't want to throw in more money until we move lower."

While technicians say the bias remains to the upside, major averages are proving unable to break through key resistance level.

"Overall, we believe that the market is still susceptible to pullbacks until equity averages can rally convincingly above resistance just above current levels," wrote Mark Newton, technical analyst at Morgan Stanley.

Such resistance levels for the S&P lie between 1204 (Wednesday's high) and 1207; 10,450 to 10,500 for the Dow, and 2138 to 2156 for the Nasdaq, he says.

At those levels, there are investors wishing to sell simply in order to break even after recent pullbacks. The indices' steep drop to five-month lows two weeks ago created a lot of this "overhead supply," according to Newton, explaining in part why remains "somewhat skeptical that the countertrend bounce that began 13 days ago should lead to the much-anticipated fourth-quarter rally."
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 appreciates your feedback; click here to send him an email.