NEW YORK (

TheStreet

) -- The markets closed down Monday despite signs of M&A activity.

The

TST Recommends

Dow Jones Industrial Average

dropped 39.21, or 0.38%, to 10,174.41. The

S&P 500

fell 4.33, or 0.40%, to 1,067.36, while the

Nasdaq

lost 20.13, or 0.92%, to 2,159.63.

Joe Terranova said on

CNBC

's "Fast Money" show that the problem with the markets is that over the next week and a half there will be a struggle between the headwinds, in the form of economic data, starting with Tuesday's existing homes sales report, which is expected to be "lousy" and the tailwinds, in the form of M&A activity.

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 onTV

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He said reports of the

Hewlett-Packard

's

(HP) - Get Report

bid for

3Par

(PAR) - Get Report

weren't enough to lead the market higher.

Tim Seymour took the contrarian view, saying that conditions are favorable for export-minded companies with good balance sheets.

Steve Cortes said he was encouraged by what

BH Billiton

(BHP) - Get Report

is doing in its move to acquire

Potash

(POT)

. He said it clearly says "business has not fallen off the cliff."

Karen Finerman echoed that sentiment, saying that BHP's move demonstrates companies are willing to take the long perspective despite the current market uncertainty.

Melissa Lee, the moderator of the show, alluded to a Bank of America-Merrill Lynch chart that ominously predicted how a break in the S&P at 1,010 could lead the index down to 950 and then to 870. She said the inability of the financials and technology to show leadership has been a problem.

HP was the Dow's worst performer for the day.

CNBC

reporter Jon Fortt said that HP's bid for 3Par makes a lot of sense because HP can get more out of 3Par than

Dell

(DELL) - Get Report

.

He said HP has a huge platform to build the storage data technology on and has more cash than Dell. He doubted whether

Oracle

(ORCL) - Get Report

would enter the bidding war.

He said smaller players in the storage data space were getting a lift from the HP-Dell bidding contest.

Another area of M&A activity has been the ag trade, with rising wheat prices and the Potash takeover saga. Finerman called Potash a "unique" asset that is drawing interest, while Terranova said there is room for the stock to appreciate.

Cortes said Australia and Canada will make sure Potash ends up in "closed" hands that will limit any stake by China in it.

Jason Trennert, chief investment strategist for Strategas Research Partners, offered a bullish case for the economy. He said he is bullish on both the cyclical and valuation perspectives.

He said many stocks have discounted for a double-dip that he argued isn't coming next year. He is overweight on financials and is heartened by the pickup of M&A activity.

He said profits as a percentage of GDP is at an all-time high, a sign that he said normally leads to strong employment and capital expenditures.

Looking at tomorrow's headlines, Nishu Sood, an analyst with Deutsche Bank, said he's expecting the existing home sales report to show a decline of 15% to 20%.

He said homebuilder stocks will start to recover only when the economy starts to deliver job growth. He said the risks of foreclosures and excess inventory have subsided due to the government's efforts.

With investors looking at utilities for their big dividend, Dan Eggers, a Credit Suisse analyst said utilities also offer underlying areas of growth. He mentioned two he liked, in particular:

CMS Energy

(CMS) - Get Report

and

PG&E

(PGC) - Get Report

Terranova said he liked PG&E for its pricing power and signs of an increase in industrial electricity use.

For the hedge fund pick of the week, Anthony Scaramucci chose

General Dynamics

(GD) - Get Report

, a stock he said is held by 50 or so hedge funds.

Though the defense business is slow, General Dynamics is very cheap for a stock that offers six times EBITDA, eight times 2011 earnings, a 2.8% dividend and a fortress balance sheet, he said.

Lee brought in Joe Sanderson, CEO of

Sanderson Farms

(SAFM) - Get Report

whose stock was up 6.8% after Russia lifted the ban on chicken imports.

Sanderson said he has already noticed an increase in pricing power since the lifting of the ban. He said U.S. demand remains weak, a situation that won't change until the jobs market improves.

In a 30-second segment called "The Pitch," Kelly said he liked

Andersons

(ANDE) - Get Report

because it stands to benefit from a 30% rise in the storage facility rate.

In the final trades, Kelly said he liked

SPDR Gold Trust

(GLD) - Get Report

. Seymour liked

Bank of America

(GLD) - Get Report

, while Cortes liked BH Billiton. Finerman liked

Compass Minerals

(CMP) - Get Report

. Terranova liked

Occidental Petroleum

(OXY) - Get Report

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

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