NEW YORK-It hard­ly need­ed it, but the US stock mar­ket yes­ter­day got an­oth­er re­minder of how its for­tunes are in­ex­orably tied to the Eu­ro­pean econ­o­my. All three ma­jor US stock in­dex­es sank af­ter a dis­mal re­port about bad loans on the books of Span­ish banks. The day be­fore, US stocks had soared af­ter Spain held a suc­cess­ful auc­tion of two-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.

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 ten-year Trea­sury note fell back be­low two per cent and was 1.98 per cent in af­ter­noon trad­ing.

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 yes­ter­day 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.