By MARK JEWELL

AP Personal Finance Writer

Stock market volatility is back, a signal to some experts that the powerful rally that started in early March may be coming to an end.

BLACKROCK INC  NYSE:BLK  Updated: 16:01 ET  229.19  +1.58

MORNINGSTAR INC  NASDAQ:MORN  Updated: 16:00 ET  47.27  -0.61

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 on 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 nearly 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.

``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 Inc. analyst. ``There's all this uncertainty surrounding health care and unemployment. People are just really confused about what to do, and that is contributing to volatility.''

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 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.

``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 on 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.

On Thursday, investors interpreted jobless claims falling more than expected, retailers posting a second straight month of sales gains and productivity rising at an annual rate of 9.5 percent in the third quarter as all being good news.

MONEY MANAGERS: Mutual fund managers who control some $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. And many mutual funds close the books for their fiscal year at the end of October, motivating managers to make a move before November.

``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. Think of it as renting stock, not owning it for the long term.

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, says 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 says.

Dan Deming, a trader with Stutland Equities, says many money managers are just content to wrap up the year.

``It's a psychology that drives a big chunk of the market,'' he says. ``This is not a typical year, and we've seen huge gains. People are looking to take risk off the table, and looking to get out of the market.''

11/08/09 12:25 © Copyright The Associated Press. All rights reserved. The information contained In this news report may not be published, broadcast or otherwise distributed without the prior written authority of The Associated Press.