Stocks Continue Deflating on Inflation

Updated from 12:11 p.m. EDT

Stocks in the U.S. were mired in the red Tuesday as traders dealt with a slew of bad tidings, including warmer-than-expected inflationary data, negative news on the corporate side and another record for oil prices.

The Dow Jones Industrial Average tanked 180 points, or 1.4%, to 12,835 under the weight of Home Depot (HD Quote - Cramer on HD - Stock Picks), the day's worst-performing component. The other 29 stocks it tracks -- with the exception of energy names Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks) and Chevron (CVX Quote - Cramer on CVX - Stock Picks) -- likewise headed downhill.

Broader indices were performing a bit better, but were still well under water: the S&P 500 sank 11 points, or 0.7%, to 1416, and the Nasdaq Composite was down 21 points, or 0.8%, at 2495.

Bill Stone, chief investment strategist with PNC Wealth Management, believes this is a natural unwinding after a months-long run-up for stocks.

"It's about time for a selloff," said Stone, "You have to take a step back every once in awhile. This doesn't shake me."

Before the opening bell, the Labor Department said that prices of goods at the wholesale level, excluding the volatile effects of energy and food, rose 0.4% in April from the prior month. That's double the 0.2% increase that economists were expecting, and also twice the price pickup of the prior month. Year over year, the core index was up 3% -- the biggest gain since December 1991 and topping the 2.8% high set in July 2005.

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