Stocks recovered to close in positive territory even as retail sales and initial jobless claims numbers came out worse than expected.

Initial jobless claims numbers could have been an anomaly; time will tell.

The Euro rallied to close at 1.28 against the U.S. dollar as Spain and Italy's sovereign bond auctions met with better demand than expected.

While the ECB (European Central Bank) kept interest rates unchanged, interest rate cuts down the horizon are almost a certainty; this will pressure the Euro versus other currencies.

On the sovereign side, European countries will have to collectively sell roughly $1 trillion of debt in 2012 to replace existing debt that will be coming due or to cover deficits.

Throughout the course of these bond auctions, some may not go swimmingly well which will undoubtedly weigh down on the markets.

On the corporate side, things were fairly quiet with many looking to JP Morgan's earnings on Friday.

Bank profits will no doubt come under pressure as we move along this year; the question centers on how bad the carnage will be.

Hostess Brands (maker of the famous Twinkies dessert) filed for bankruptcy as the company proved unable to renegotiate union contracts and pension obligations.

Hostess, owned by private equity firm Ripplewood, had emerged from bankruptcy just a few years ago.

The bankruptcy brings fresh attention to the role that the private equity industry plays in the real economy.

The topic has already featured as a major primary election campaign issue with opponents attacking Mitt Romney for his tenure at private equity shop Bain Capital.

On the macro front, Treasury Secretary Tim Geithner continues ahead with a visit to China.

Normally the Chinese, ever conscious of their (politically sensitive) trade surplus discrepancy with the United States, allow their currency the Yuan to appreciate versus the U.S. dollar ahead of any visit by a U.S. Treasury Secretary.

This is an election year in the United States yet oddly the Chinese have allowed the Yuan to continue to depreciate thereby making Chiense exports more competitive.

This raises the question that Geithner's visit may be about more than just trade.

With a second U.S. aircraft carrier battle group entering the Arabian Sea (and a third one on its way), Geithner's Asia visit may have more to do with Iran (the Chinese and the Japanese are large net importers of energy).

University of Michigan Consumer Confidence numbers are out on Friday.