On the positive side, there was Microsoft's (30.45, MSFT) takeover bid for Yahoo (28.38, YHOO), stronger than expected results from reports on Michigan Sentiment and ISM Manufacturing, a big drop in crude oil prices ($89/bbl, down $2.75) and a report that a consortium of banks are working to come up with a bailout plan for the troubled bond insurers.

The Dow finished up 92.83 after trading between down 48 and up 117; NASDAQ finished up 23.5 after trading from down 15 to up 29. Market breadth was positive - 4/1 on the NYSE and 2/1 on the NASDAQ. Overall trading volume was mixed - higher on the NASDAQ, lagging on the NYSE. All the market sectors finished higher, and like Thursday, small cap stocks led their larger-cap brethren.

We maintain our defensive market opinion as we expect the enthusiasm to fade over the major M&A deal and the possible bank consortium solution. These developments will not eliminate many of the problems the economy faces and we expect the downtrend for stocks to resume soon.

Today - foreign markets traded sharply higher overnight, at least partially on follow through to our strength on Friday. Globex futures trading points to a slightly lower open as the U.S. market consolidates last week's gains.

A.G. Edwards Chief Market Strategist Al Goldman keeps you abreast of the latest stock market news, market activity and economic reports in his daily stock market commentary (updated three times daily).