The Dow Jones Industrial Average has risen or fallen more than 100 points in eight of the past 13 trading days, capped by a 205-point advance Thursday and a 203-point jump Monday, which puts the index 56 percent higher than its closing level March 9.
The latest volatility surge comes after a calm stretch. Over the preceding two months, there were just eight days in which the daily Dow change exceeded 100 points.
While the volatility brings back memories of last fall's financial crisis, few analysts are predicting a huge downdraft is coming. Instead, they say it's not uncommon to see choppy trading patterns when investors begin to fret that a bull market is running out of steam.
"We've had a heck of a rally, and we're at one of those inflection points, where people are trying to figure out if they should sell their winners or not," says Scott Burns, a Morningstar analyst.
A closer look at what's driving volatility:
INDICATOR WHIPLASH: Investor anticipation of an economic recovery played a large role in the stock market's advance over the past eight months. But recent economic indicators have been sending mixed signals, leading some economists to predict a double-dip recession and others to forecast a recovery as steep as the decline.
"The market anticipated the event, the event took place, and now the market is looking for the next event," says Bruce Bittles, chief investment strategist for Robert W. Baird & Co.
The Dow jumped 200 points Oct. 28 after the government reported the economy grew at a 3.5 percent pace in the July-September quarter. But the stock gains were more than canceled by a 250-point slump the next day. The trigger: a consumer confidence report that showed there's still pervasive anxiety about a recovery, particularly as unemployment continues rising.
MONEY MANAGERS: Mutual fund managers who control about $5 trillion invested in stocks often switch from buying to selling whenever rallies show signs of faltering. The goal is to lock in gains from rising stock prices.
Normally, that happens in December to dress up returns and put a positive spin on year-end results. But sometimes managers lock in gains earlier if the market is in a sustained rally.
"Why not beat the Christmas rush and start taking some profits now?" says Art Hogan, chief market analyst at Jefferies & Co.
Likewise, money managers are just as likely to dive back in if they think short-term profits are there for the taking.
MELTDOWN AFTERSHOCKS: Gains or losses of more than 100 points in the Dow became common late last year, and the market still hasn't calmed to the extent you can expect a steady ride, said Bob Doll, chief investment officer at BlackRock Inc., a money management firm.
Recoveries are typically choppy, as investors zigzag before stocks eventually settle into a narrow range, he said.