As a heavy snowfall literally smothered activity around Wall Street, traders Thursday worried a negative retail sales report contains bigger warnings about the economy than just the impact of bad weather.
January's retail sales declined 0.4 percent month to month, well below expectations for slightly positive growth. Economists immediately trimmed first-quarter GDP growth forecasts.
Goldman Sachs said first-quarter GDP growth is now tracking at a 1.9 percent pace, from 2.3 percent previously.
Also, Credit Suisse economists said they now see first-quarter GDP coming in at 1.6 percent, and both firms said the fourth quarter now looks weaker after December sales were revised lower, to a decline of 0.1 percent, instead of a 0.2 percent gain.
But the stock market shrugged off what started as a negative day for markets, following on a global "risk off" trade in equities.
"Maybe part of this bounce back is with Europe. Germany is back up on the day ... the action in Europe was better than it was a few hours ago. That helped us bounce off our lows," said Peter Boockvar, chief market analyst with The Lindsey Group. "There's nothing in the data to make us rally unless they think this means the Fed will stop its taper."
Momentum names were a bright spot in the market, with Apple higher and big gains in Tesla and Priceline. Orbitz gained sharply on strong bookings, perhaps from storm-numbed consumers hoping to escape the weather.
(Read more: Storm creates single worst travel day of winter)
From his perch on the NYSE floor, Art Cashin said the flattish trading might itself be explained by the weather. The usual contingent of traders were not at their desks. "And the rest are wondering how they're going to get home," said Cashin, director of floor operations at UBS.
He said there is concern the retail sales are flagging other concerns about the consumer and it's masked by the impact of winter weather.
Online sales, for instance, were lower, and that would be one area consumers might make up for their inability to get to stores.
Markets were also seemingly unruffled by a possible change of government in Italy as that country's prime minister, Enrico Letta, said he will tender his resignation on Friday. "It just seems to me Italy's problems don't seem acute, they seem chronic," said Marc Chandler, chief currency strategist at Brown Brothers Harriman.
(Read more: Fed moves will put lid on 2014 stock gains: Knapp)
There was also talk that Moody's could take negative action against Italy. "The euro shrugs it off. It is not a very high risk. Political changes aren't going to have an influence on their ratings. ... Their problem is chronic slow growth. So you are seeing some pressure on Italian bonds."
The euro, however, was higher.
Chandler said there were a lot of questions flying about the Fed after the weak retail sales number, but Fed Chair Janet Yellen has already cautioned weather may be a factor in weak jobs data and that the Fed needs to see more data before it can tell what's behind the sluggish reports.
She also said the bar is high on moving away from the plan to wind down bond purchases.
Goldman economists blamed weather for the weak retail sales number. "The January retail sales report was a significant disappointment, compounded by negative back revisions. Adverse weather was likely a substantial contributor to the weaker January figures. Separately, jobless claims were roughly in line with expectations. We reduced our Q1 GDP tracking estimate by four-tenths to 1.9 percent," they said in a note.
(Read more: Retail sales, blame it on the weather?)
Barclays, meanwhile, cautioned that the retail sales disappointment was not all weather.
"Weakness in autos (-2.1 percent), department stores (-1.5 percent) and eating out (-0.6 percent) led the decline and, in all likelihood, can be at least partly explained by bad weather conditions during the month, particularly on the East Coast. However, movements in some other components are more difficult to square with that as a catch-all explanation—such as a drop in internet sales (-0.3 percent) and a strong gain in building materials (1.4 percent)," they noted.
Boockvar also said the numbers don't add up, but there should be some spring back when the weather improves.
"On line retail sales went down. You would think they would go up. Maybe people went out and bought more salt and that helped buidlng materials but if construction stopped I would think that would offset (things like) plumbing repairs," he said.
—By CNBC's Patti Domm. Follow her on Twitter @pattidomm.