Stocks searched for direction in intraday trading Thursday as the July read of the Producer Price Index came in hotter than expected.
The Dow Jones Industrial Average was down 89.93 points, the Nasdaq Composite was down 8.95 points and the S&P 500 was down 3.75 points.
PPI for final demand increased 1.0% in July, exceeding consensus estimates of 0.6%.
The data followed consumer price index, or CPI, data that came in better than feared Wednesday. CPI came in up 0.5% month-on-month to 5.4%, which Jim Cramer called the "principal reason" stocks were higher Wednesday.
Cramer told Action Alerts PLUS senior analyst Jeff Marks the July PPI read signals the Federal Reserve will begin tapering and raising interest rates.
"High-multiple stocks are under pressure. It's not your fault, it's not their [company] faults, it's the fault of rates," Cramer said.
Cramer said that the current environment makes a balanced portfolio more important than ever.
For example, AAP owns names like PayPal (PYPL) - Get PayPal Holdings Inc Report and Mastercard (MA) - Get Mastercard Inc. (MA) Report, but also holds onto more traditional banks such as Wells Fargo (WFC) - Get Wells Fargo & Company Report and Morgan Stanley (MS) - Get Morgan Stanley (MS) Report. "That's the barbell writ large," Cramer said.
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