Could bad headlines and bond yields drag down markets?

Bad news among select Dow components, such as IBM, Wednesday kept the index from continuing Tuesday's market rally, UBS's Art Cashin told CNBC on Wednesday.

He cited reports of IBM having trouble with its supercomputer, Watson, as an example of "component complications" contributing to mixed performances in the Dow and S&P during the first five trading sessions of 2014.

"We came in this morning with really high hopes it would be the Dow—which had been the strongest of the averages over the past several days—that could put us into a new high and recapture that first five-day indicator that everybody's been talking about," Cashin said on "Squawk on the Street." "But the components aren't pulling together for that."

(Read more: Cashin: I want to see this at Wednesday's close)

Market watchers should also monitor 10-year Treasury bond yields after the Fed releases its meeting minutes Wednesday afternoon. He said if they surpass 3.25 percent, the markets could get "twitchy."

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."