S&P futures dropped 5 points on the reported death of Benazir Bhutto after a suicide bombing at a rally in Pakistan, then an additional 2 points as the durable goods report was below expectations.

Reading newspaper headlines (and a few analyst reports) the two days after Christmas, you would think some disaster has befallen the American economy. Retail sales were reportedly in the doldrums; everyone seemed in a foul mood.

But according to MasterCard SpendingPulse, total U.S. retail sales, excluding automobile sales, rose 3.6% for the holiday season, spanning the day after Thanksgiving to midnight Monday. Maybe that is a tad below expectations, but it is hardly a disaster. E-commerce had a particularly strong year, posting a 22.4% gain in sales from the same period a year ago.

Personal spending remains strong -- in fact, it grew at the fastest pace in three-and-a-half years.

S&P 500 closed at its highest levels since December 10 and has been up five of the last six days; up 5.6% year to date.

Meantime, retail stocks are just above their lowest levels for the year.

Elsewhere:

1) Citigroup

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[C  Loading...      ()   ] down 2 percent pre-open as Goldman Sachs analyst William Tanona lowered estimates; he said Citi may cut its dividend by 40 percent and may need to raise an additional $5 billion to $10 billion in capital.

2) Sallie Mae

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[SLM  Loading...      ()   ] down 10 percent pre-open, as it seeks to raise money through a $1.5 billion common stock, $1.0 billion mandatory convert preferred.

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