Stocks closed in the red with the S&P stock index -1.1% lower as treasury bonds rallied in a continued short-squeeze.

Oil experienced a mini sell-off (when compared to the magnitude of last week's sell-off) and closed at $98 a barrel.

Corporate credit spreads out-performed on a relative basis and closed only a couple of basis points wider even as chatter continued about the impact of a European peripheral restructuring on European bank debt levels.

The relatively firm tone in corporate credit can be explained by the mountains of cash that real-money investors have to put to work.

But if Treasury bond prices keep rallying and stocks experience a correction of sorts we can see a significant re-pricing in corporate risk levels.

Anything from geopolitical risk to the European sovereign debt story could weigh on the markets.

On a note of optimism, this player attended the annual dinner of the EastWest Institute; the institute's work can go a long way toward mitigating geopolitical headwinds that would affect the economy.

In corporate bond new issues, 3 year appears to be the new 10 year; the new bond maturity sweet spot for investors.

In addition, the Brazilians are en fuego with one more Brazilian bank issuing debt this week.

Utility DTE sold $250 million of 10 year bonds at +77.

Consumer food maker General Mills sold $400 million of a 3 year FRN (floating rate note) bond at +35 and $300 million of 3 year fixed bonds at +63.

MIT, the university, sold $750 million of 100 year bonds in a deal that was mainly subscribed to by insurance players looking to match their duration profiles; a planned 30 year bond issue was canceled.

Spanish bank BBVA sold $1 billion in 3 year fixed bonds at +237.5 bps and $600 million of 3 year FRNs at +212.5; the FRNs were driven by reverse inquiries; this deal is expected to perform very well in secondary trading.

Brazilian bank Banco Safra issued $300 million of 3 year bonds at +262.5 bps.

Initial jobless claims and advance retail sales numbers are out tomorrow.