NEW YORK (AP) -- It hardly needed it, but the U.S. stock market on Wednesday got another reminder of how its fortunes are inexorably tied to the European economy.
All three major U.S. stock indexes sank after a dismal report about bad loans on the books of Spanish banks. The day before, U.S. stocks had soared after Spain held a successful auction of 2-year bonds.
The results underscored how the stock market can whipsaw on even incremental news out of Europe, and it has done just that for the past couple of weeks. In the 12 trading days of the second quarter so far, the Dow has fallen by triple digits four times, with Europe as a notable factor. Twice, it has risen by that same proportion.
It's not just the news itself, which can vary from hopeful to horrific and back again in just a couple of days. It's that investors have been inconsistent in how they react, sometimes shrugging off what seems like significant developments and at other times seizing on what seems piecemeal.
It's a time when "one headline can get you to change your mind," said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. "When you go from one day being concerned about Spain to the next day, 'Oh, they had a good auction,' that's a lack of conviction," meaning investors aren't sure what to think.
The market "is really difficult to classify" at the moment, added Mike Schenk, senior economist at the Credit Union National Association, a trade group. "On one hand you hear about 'best day since whatever,' on the other hand you have days and weeks that don't look good at all."
The Dow Jones industrial average fell 82.79 points to 13,032.75. That was a U-turn from Tuesday's gain of 194 points.
The euro fell and Treasury prices rose as nervous investors looked for safe places to store their money. The yield on the 10-year Treasury note fell back below 2 percent and was 1.98 percent in afternoon trading.
A flood of first-quarter earnings also influenced the market in temperamental ways. Of the S&P 500 companies to report earnings so far, 78 percent have recorded per-share earnings that beat analysts' estimates, according to FactSet senior earnings analyst John Butters. But that hasn't always been enough to lift their share prices. IBM and Intel beat estimates late Tuesday but fell the most in the Dow on Wednesday because investors were disappointed by flat revenue. St. Jude Medical and money manager BlackRock also beat estimates but their stocks fell anyway.
The Standard & Poor's 500 fell 5.64 points to 1,385.14 and the Nasdaq composite index fell 11.37 points to 3,031.45. The declines come after a stellar first quarter, when the Dow and the S&P 500 both recorded their best openings to the year since 1998.
To be sure, the European debt crisis isn't new. But Wednesday brought fresh reminders that the situation is impossible to predict.
The International Monetary Fund issued an unsettling report saying banks could cut back significantly on lending to preserve capital. A Dutch bank refused to give a break to Greece's Hellenic Railway Organization and Athens' metro on money they owe, underscoring how difficult it will be for indebted countries to hammer out rescue agreements when there are so many competing interests to please. And a leader of the European Union slammed the 27 member countries, scolding them for administrative barriers that keep them from sharing workers and resources and potentially endangers any recovery.
"We don't have clarity there, we don't know what's going to happen, and we don't know if things don't go our way what the ramifications will be," Schenk said. "You and I and the rest of the investment world will continue to worry about uncertainty and volatility for a good while."
Spain reported that the proportion of bad loans at its banks has risen to an 18-year high, and its benchmark stock index fell 4 percent.
For all the headlines that the Greek crisis generated, Spain is potentially a much bigger problem. Greece makes up about 2 percent of the gross domestic product of the 17 countries that use the euro, but Spain makes up 11 percent. Its problems also raise questions about how far the crisis will spread.
"If you see deterioration in Spain, you've got to ask yourself, 'What happens with Portugal? What happens with Italy?'" said Quincy Krosby, market strategist for Prudential Financial.
Investors will be closely watching Spain's sale of 10-year bonds Thursday. Those results could drive the market for the rest of the week.
Excluding Greece, major European markets fell. That was a reversal from the previous day, when Spain's bond auction sent European stocks storming to their best day in four months.
Britain's benchmark index fell 0.4 percent after the Bank of England hinted that it doesn't plan to extend its bond-buying program, which essentially pumps money into the economy and is meant to lift stock prices. Similar revelations from the Federal Reserve have hurt the U.S. market.
In Germany, a relative stalwart among countries that use the euro, there was strong interest in a sale of 2-year government bonds. Though that could be construed as good news for Germany, it's also a sign that investors are nervous about the region's economy. People tend to plow their money into safe-haven bonds when they don't have much confidence in stocks.
Among other stocks making big moves:
—U.S.-listed shares of YPF, the energy company seized by the Argentine government, plunged nearly 33 percent.
— Halliburton, the oil services company, rose more than 4 percent after posting a 23 percent jump in first-quarter profits.
— Yahoo rose more than 3 percent after reporting late Tuesday that it had notched a year-over-year increase in quarterly revenue for the first time since 2008.