'Fast Money' Recap: M&A Catalyst?

NEW YORK (TheStreet) -- The markets rallied Tuesday on a resurgence of M&A activity.

The Dow Jones Industrial Average jumped 103.84, or 1.01%, to 10,405.85, while the S&P 500 added 13.16, or 1.22%, to 1,092.54. The Nasdaq rose 27.57, or 1.26%, to 2,209.44.

Guy Adami said on CNBC's "Fast Money" TV show that he believes the market will head lower despite today's rally.

Gary Kaminsky said he wasn't impressed with today's M&A activity, calling it a five out of 10. He said it would have to be significantly stronger to move the market higher.

Karen Finerman, though, was encouraged by BHP Billiton's (BHP) spurned bid for Potash. She thought it was a very aggressive move that fostered confidence and could ignite other M&A activity in that space.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Joe Terranova said he, too, was encouraged by the M&A activity in the ag space and the continuation of the rally in the tech sector.

Adami cited the tremendous trade volume in Potash today and advised investors to wait for a pullback before getting in.

Kaminsky said the M&A activity around Potash and Genzyme was unimpressive because they involve one "natural buyer." Finerman disagreed, saying Potash could attract bidders from around the globe.

Tim Seymour sided with Finerman on this point, saying mining companies may begin to absorb the ag companies. "It's part of their integrated model." He said BHP will chase this deal and will probably wind up overpaying for Potash.

He said Potash might be too large for some bidders to take on. He suggested Mosaic (MOS) as a less expensive option.

Terranova said he feels Potash will head north because of a dramatic shift sentiment in the company from a month ago as well as a pricing change and a wheat supply situation that is bullish for corn. "It's a perfect storm."

Melissa Lee, the moderator of the show, shifted the discussion to the retail sector where Home Depot (HD) and Wal-Mart (WMT) had raised their forecasts.

Patty Edwards, though, said retailers still have to deal with cautious shoppers. She noted that Abercrombie & Fitch (ANF) is closing 60 stores, discounting prices by 15% and building inventory.

Lee noted that Research In Motion (RIMM) was hit after a report that Amazon.com (AMZN) had discounted the price of its new Torch smartphone to $99.

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