After a couple weeks of selling and a lot of hullabaloo about the economic recovery being dead on arrival, the bulls announced yesterday that they, like the recovery, aren't quite dead yet. And while the slightly better-than-expected ISM Non-Manufacturing Composite got most of the credit in the popular press for the triple digit dance higher, we're of the mind that it was more the realization that a handful of disappointing economic reports does not a double-dip make.

While the recovery theme did lose a fair amount of momentum last week, the economic calendar provided a nice tailwind for stocks to start out the new week. The star of the day was the ISM Non-Manufacturing Index, which rose 2.5 points in September to 50.9. This was the first reading above 50 since August 2008, which is indicative of growth in the services sector. While we don't want to bore you with too many details, it is worth noting that New Orders rose 4.3 points to 54.2, while the business index increased 3.8 points to 55.1, and both were the highest levels since October 2007.

The bulls also got a hand from some renewed talk about M&A activity. We learned that Brocade (BRCD) will put itself up for sale and that both Hewlett-Packard (HPQ) and Oracle (ORCL) are looking for acquisitions. In addition, there was talk about Emulex (ELX) and NetApp (NTAP) being acquired. And finally, Cisco (CSCO) CEO John Chambers said he sees acquisitions "heating up." So, while M&A talk doesn't produce higher prices for the market all by itself, it also doesn't hurt. Let the games begin.

Speaking of things that don't hurt the bulls, an upbeat call on the banks out of Goldman Sachs (GS) bolstered the banking indices yesterday. Goldman argued that the market has yet to recognize the "meaningful improvement in earnings power" at the large banks and that tangible assets have increased by almost 30%.