Stock volatility is back, a bull run nears end

World stock market volatility is back, a clear signal to some market watchers and pundits that the powerful rally that began in late March may be coming to an end, or at least face a choppy time of violent fluctuation.

The Dow Jones industrial average rose or fell more than 100 points in seven of the past 12 trading days, capped by a 205-point advance Thursday that left the index almost 53 percent higher than its closing level on March 9.

The Dow's muted 17-point gain on Friday masked the fact that it swung up to 108 points throughout the day after the government reported the unemployment rate rose to 10.2 percent in October.

The latest volatility surge comes after a calm stretch. Over the preceding two months, there were just eight days where 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.

Investor anticipation of an economic recovery played a large role in the stock market's advance over the last 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.

People's Daily Online