Small-cap stocks started out the week in the red, but the early dip in equities did not live up to the selling interest suggested by overnight trends and a surprisingly stout ISM Non-Manufacturing Survey sparked a bout of buying that lifted stocks back toward steady levels. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.05, or 0.1%, at 724.69.

The ISM Non-Manufacturing Survey came out at 52%, which was well above the median forecast of 49.5%, and the highest point since December. The reading also snapped three consecutive months of contractions, which is a plus for the economic outlook.

The market had a bit of the merger blues this morning after weekend news that Microsoft (Nasdaq:MSFT) pulled out of negotiations for a takeover bid of internet services company Yahoo! Inc. (Nasdaq:YHOO). Yahoo shares took it in the chin on the news, sinking 18% in early trading Monday. The deal was reportedly close to fruition and the failure to close might take some excitement out of the M&A picture — at least in the short run. That said, wireless phone company Sprint (NYSE:S) was up 7% on news that the firm could be a takeover target.

Marvel Entertainment Inc. (NYSE:MVL) shot up nearly 8% this morning . . .

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