Beware the Pain In Spain

The rain in Spain didn’t stay mainly on the plains.

Spain’s government bond auction early Thursday failed to raise the 4 billion euros it sought, sending U.S. stocks plummeting. The Dow dropped 134 points, closing down 1.13 percent, with the S&P down 20 and Nasdaq 51 points lower.

“Not since the Spanish Civil War — not since Christopher Columbus, if you want to go back in time — has Spain mattered so much to the global stage — or to us,” Jim Cramer said after the closing bell.

The “Mad Money” host said he woke an hour before the 4:30 a.m. ET auction and soon stopped his research “because I knew that whatever I read would be inconsequential versus a Spanish bond that comes due in 2021.”

Disastrous bond results, Cramer said, made the question simple: How stupid is it to buy anything?

Positive reports on retail and joblessness showed that the United States was at least moving in the right direction, and several individual companies showed early gains.

Cramer touched on a few:

  • Children’s Place: The retailer reported strong numbers and “moved up huge.”
  • LinkedIn: “A big slug of stock priced well below where the stock was when the deal was announced made you 4 points.”
  • MeadWestvaco: A “terrific” packaging company with a decent yield announced that it would split into two companies and buy another, ACCO Brands, an office supply company recently spun off by the former Fortune Brands.
  • Angie’s List: The company on its IPO made “some real fast cash for those willing to put in for stock with a short track record.”

Cramer said the European debt crisis continued to foster worry stateside, urging caution.

“I am not a huge bull or a huge bear here,” he said. “Europe’s real bad; we aren’t as bad. Their countries and their banks are in trouble, much more by the day as the authorities take action, and our markets are collateral damage.”

Stay away from businesses that have significant exposure to Europe, Cramer said. “You can’t own banks.”

Lastly, the question isn’t whether a stock will fall because with Spain’s trouble on Thursday as with Italy’s last week, everything will decline.

“The question is whether your stocks will bounce back because they shouldn’t be impacted but just went down because they are part of a larger falsely interconnected world,” he said.

Watch the video for the full "Mad Money" segment.

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