'RealMoney' Radio Recap: Cooling on Construction

Jim Cramer is shaking with fear over what American Standard's (ASD Quote) earnings miss and lowered guidance mean for the economy, he said on his "RealMoney" radio show Tuesday.

American Standard, which makes air-conditioning systems and fixtures for homes, reported particularly poor results in its kitchen and bath segment, said Cramer. That signals bad news for the economy, he said, because it means housing construction and remodeling, which have been keys to the economy and strong for a long time, are weakening.

American Standard CEO Fred Poses said the consumer is finally feeling pinched by higher interest rates and high gas prices, and Cramer said he believes him.

Cramer said the Federal Reserve must stop raising interest rates. If they don't, he is going to turn incredibly bearish.

Other stocks down in sympathy with American Standard are Masco (MAS Quote), Fortune Brands (FO Quote), Lowe's (LOW Quote), Home Depot (HD Quote), Toll Brothers (TOL Quote)and Lennar (LEN Quote), said Cramer.

It wasn't all bad news, though, Tuesday. Cramer said Johnson & Johnson (JNJ Quote), 3M (MMM Quote), United Technologies (UTX Quote), Merrill Lynch (MER Quote), Wachovia (WB Quote) and Genzyme (GENZ Quote) all reported good quarterly results. But if the Fed doesn't soon stop raising interest rates, it won't matter, he said: The average stock will get hurt.

Commenting on oil stocks, Cramer said they are in a precarious position. Cramer said that a block of 25 million shares of Exxon Mobil (XOM Quote) traded today at a $1.80 discount to the market price, but XOM's stock is now trading below that discounted price.

He added that people are selling energy stocks because they believe the economy is weak, which will curb demand for oil.

In response to a question about BioCryst Pharmaceuticals (BCRX Quote), a stock Cramer recommended last week for a trade, Cramer said it is time to ring the register. He is no longer interested in the stock.