The nation's retail sales slipped 0.2% in January as spending on new cars and trucks slowed from the fall's heavy pace. But strip out autos, and retail sales grew 1.2% -- an increase that bodes well for the pace of the economy's recovery.

While the dip in overall retail sales was expected, economists had thought non-auto sales would only gain 0.2%. Meantime, the December numbers were revised higher, with the overall sales number upped to a 0.2% gain from a 0.1% decline and the ex-auto number upped to a 0.7% gain from a 0.1% drop.

"The revision to December and the stronger ex-auto numbers is supportive of the view the economy is recovering," says Paribas Capital Markets senior bond strategist Richard Gilhooly. "It's not a strong recovery, but it is a recovery."

Following the report, the

S&P 500

futures were up 4, pointing to a gain at the open for stocks. Treasuries were lower, with the benchmark 10-year off 12/32 to 98 26/32, pushing the yield to 5.03%.