Halftime—Jon Najarian: Unusual Activity In These 2 Names

Talk of mergers and acquisitions is prompting some unusual options activity, said Jon Najarian of optionMONSTER.com on Monday.

With Caterpillarseeking to acquire Bucyrus, Najarian said there's been a lot of activity in crane maker Manitowoc. A cheap stock, Najarian thinks the farm and construction machinery producer could very well be a takeover target. He's in the January calls.

Meanwhile, shares of Nicor fell sharply Monday. As a result, Najarian said there's since been a lot of options activity in this gas utilities name, especially in the January 50 calls.

To see the full discussion with Najarian, watch the video.

---
TRADING CEO EXITS

Massey Energy's stock rose after announcing CEO Don Blankenship will retire by the end of the year. He will be succeeded by President Baxter Phillips, Jr.

Mergers and acquisitions talk continues to drive this stock , said Stuart Frankel's Steve Grasso, adidng that he's seeing that across the coal space. For his part, Grasso likes Peabody Energy, a coal stock that continues to outperform.

Based on how coal stocks are doing, Najarian said coal is something you'd like to find in your Christmas stocking this year. He likes Arch Coal, in addition to MEE and BTU.

---
BOND FUNDS HAVE 1ST WEEK OF OUTFLOWS

After 99 straight weeks of inflows, bond flows posted their first week of outflows last month, according to Trimtabs. So are investors finally embracing equities?

Vote

Vote to see results

Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

"We had expected reallocation away from treasurys into equities, but let's see if it develops into a little bit of a trend over the next four-to-six weeks," said Joe Terranova, chief market strategist of Virtus Investment Partners.

Brian Kelly, founder of Kanundrum Capital, recently went long the ProShares UltraShort 20+ Year Treasury exchange-traded fund, which is basically short treasurys. Kelly said it's smart for investors to make the move from treasuries into equities because he lacks confidence in how long the bond rates can hold up.

Watch the video to see the full conversation.

---
POPS & DROPS

Here's the market movers that caught the traders attention Monday:

Pops (stocks that went higher)

Reynolds American (RAI) popped 12%: Grasso thinks the tobacco names will see continued strength and he likes RAI for its 6.10 percent dividend yield.

Drops (stocks that fell)

Celegene (CELG) dropped 9%: To Terranova, this is a "classic example" of why you should buy an ETF instead of an individual biotechnology name. He recommends the SPDR S&P Biotech ETF.

Big Lots (BIG) dropped 2%: This stock fell after it missed on earnings, said Kelly. He suggests selling out and buying coal names.

RadioShack (RSH) dropped 2%: The Fort Worth, Texas-based retail became the first to cut prices on Apple's iPhone, but Najarian thinks it's a "smart move" in the long-term. He would be a buyer on this dip.

---
CALL THE CLOSE

With just hours left in trading Monday, here's how the traders expect things go turn out.

Kelly guessed the market could end higher.

Grasso thinks the market will sell off at least once again this year, but said if the S&P 500 index closes above the 1,228 level, he'll "get on the bull wagon."

Najarian remains bullish.

Terranova said the markets could fall, but it would be a buying opporutnity.

______________________________________________________
Got something to to say? Send us an e-mail at [e-mail] and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to [e-mail].

Trader disclosure: On December 6, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long (CME) stock, short (CME) calls. Jon Najarian owns (BTU), (ACI), (RSH) and (BUCY). Jon Najarian is long (CBOE) stock, short (CBOE) calls. Jon Najarian is long (DRYS) stock, short (DRYS) calls. Jon Najarian is long (MTW) stock, short (MTW) calls. Jon Najarian is long (WHR) stock, short (WHR) calls. Jon Najarian is long (GAS) stock, short (GAS) calls. Jon Najarian is long (AAPL) call spreads. Jon Najarian is long (YHOO) call spreads. Jon Najarian is long (XLF) call spreads. Jon Najarian is long (MS) call spreads. Jon Najarian is long (GS) call spreads. Jon Najarian is long (NFLX) call spreads. Joe Terranova owns (FCX) puts. Joe Terranova owns (CELG), (FCX), (PFE), (OIH), (UPL), (C), (GS), (NKE), (PEP), (VRTS), (AAPL), (OXY) and (CMA). Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MOT), (MHY), (NDAQ), (PFE), (PRST), (S) and (X). Brian Kelly owns (NSC), (CSX) and (MCP). Jonathan Chaplin owns Clearwire.

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (DRYS)
Accounts Managed By Kanundrum Capital Own (GDXJ)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Own (ARMH)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (DE)

Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

STEVE GRASSO
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co And Its Partners Own (UNM)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (MCD)
Stuart Frankel & Co and it’s partners are short (AAPL)

Jonathan Chaplin, Credit Suisse
Credit Suisse Is A Market Maker Or Liquidity Provider In (T), (S), (VZ), (S), (VZ), (T) Is Or In Past 12 Months Was A Client Of Credit Suisse
Credit Suisse Provided Investment Banking Services To (S), (VZ). (T) In Past 12 Months
Credit Suisse Provided Non-Investment Banking Services To (S), (VZ), (T) In Past 12 Months
Credit Suisse Has Received Investment Banking Compensation From (S), (VZ), (T) In Past 12 Months
Credit Suisse Expects To Receive/Seek Investment Banking Compensation From (S), (VZ), (T) In Next 3 Months
Credit Suisse Has Received Non-Investment Banking Compensation From (S) In Past 12 Months

CNBC.com with wires.