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8B Daily News – Thursday, April 19, 2012 NEW YORK (AP) — It hardly needed it, but the U.S. stock market on Wednesday got another reminder of how its for- tunes are inexorably tied to the European econo- my. Europe weighs heavily on US stock market Wall Street 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 auc- tion of 2-year bonds. The results under- scored 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 shrug- ging off what seems like significant develop- ments 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 econo- mist at the Credit Union National Association, a trade group. ''On one hand you hear about 'best day since whatev- er,' 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. senior earnings analyst John Butters. But that hasn't always been enough to lift their share prices. IBM and Intel beat estimates late Tues- day but fell the most in the Dow on Wednesday because investors were disappointed by flat rev- enue. St. Jude Medical and money manager BlackRock also beat estimates but their stocks fell anyway. The Standard & A flood of first-quar- ter earnings also influ- enced the market in tem- peramental 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 C & C PROPERTIES 741 Main Street, Suite #2 Red Bluff, CA 96080 1-800-287-2187 (530) 527-2187 An Independently owned and operated Member of Coldwell Banker Residential Affiliates. 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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 Euro- pean 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 say- ing banks could cut back significantly on lending to preserve capital. A Dutch bank refused to give a break to Greece's Hellenic Railway Orga- nization 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 clari- ty 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 big- ger problem. Greece makes up about 2 per- cent of the gross domes- tic product of the 17 countries that use the euro, but Spain makes up 11 percent. Its prob- lems also raise questions about how far the crisis will spread. ''If you see deteriora- tion in Spain, you've got to ask yourself, 'What happens with Portugal? What happens with Italy?''' said Quincy Krosby, market strate- gist 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 auc- tion sent European stocks storming to their best day in four months. Britain's benchmark index fell 0.4 percent after the Bank of Eng- land hinted that it does- n't plan to extend its bond-buying program, which essentially pumps money into the economy and is meant to lift stock prices. Similar revela- tions from the Federal Reserve have hurt the U.S. market. In Germany, a relative stalwart among coun- tries that use the euro, there was strong interest in a sale of 2-year gov- ernment bonds. Though that could be construed as good news for Ger- many, it's also a sign that investors are ner- vous 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 com- pany seized by the Argentine government, plunged nearly 33 per- cent. — Halliburton, the oil services company, rose more than 4 percent after posting a 23 per- cent jump in first-quar- ter 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. CARE TO COMMENT? At redbluffdailynews.com, scroll to the end of any story, click the link and type away. James W. 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