NEW YORK (CNN/Money) - For about 16 minutes after the close, traders were basking in the pleasant green afterglow of Tuesday's 378-point rally in the Dow.

Then the Intel news started flashing across their screens.

Intel's third-quarter earnings were short of estimates, management was lowering guidance for the fourth quarter and cutting capital spending plans. In the after-hours session, fingers rushed to the sell button.

Intel was quickly given a 12 percent haircut while other semiconductor names were driven sharply down. The S&P 500 and Nasdaq futures jogged lower as traders bet that Wednesday could be an ugly day for the market, breaking a four-day winning streak.

A dip into the red at the opening bell seems like a sure thing -- the more difficult question to answer is whether Intel's bad news could turn the new-born bull into a veal cutlet.

"What I wonder is are we going to see follow-through selling after the initial drop, or are we going have fund managers using the pullback to build up positions?" said Brett Gallagher, head of U.S. equities at Julius Baer Investment Management. "I'm leaning toward the latter."

It pains Gallagher to be even mildly optimistic -- he's heavy in cash and defensive stocks on the belief that, fundamentally, the market still doesn't make sense. But he thinks that, with the end of the year approaching, there are too many mutual fund portfolios willing to take a chance on the rally continuing.

Conversely, there are hedge-fund managers who have shorted the market and are up on the year as a result. In an effort to protect their gains, they may cover their short sales into any pullback. Such short covering can help lift stocks higher.

"Intel isn't the market," said Phil Roth, technical strategist at Miller Tabak. "They're marking the futures down, but I think this is a minimal affair. Everybody already knew the tech sector is in trouble. This is nervous traders protecting themselves -- not the start of a new decline."

By many lights, the market was due for a pause with or without the Intel news. In four days, the Dow traveled nearly 1,000 points. The S&P 500 index tacked on 13.5 percent.

"I put on some shorts going into the close," said Bollinger Capital Management President John Bollinger. "It seemed like a good idea -- the market had simply gone too far, too fast."

He said he plans on using the pullback to cover his short positions and pick up more longs.

"Everybody got too complacent," he said. "This will put the fear of God back into them. I think we'll pull back some, stabilize, and head higher."