NEW YORK, May 30 (Reuters) - U.S. stocks sank on Wednesday as surging bond yields in Spain and Italy ratcheted up tensions in financial markets about Europe's ability to solve its spiraling debt crisis.

The Dow Jones industrial average dropped 161.13 points, or 1.28 percent, to 12,419.56. The S&P 500 Index fell 19.15 points, or 1.44 percent, to 1,313.27. The Nasdaq Composite lost 33.63 points, or 1.17 percent, to 2,837.36.