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Whiplash for stocks may be the new norm

Wall Street’s gut-wrenching turbulence in the last six trading days has sent many investors into a state of paralysis, watching helplessly as the Dow Jones industrial average swoons 520 points one day only to soar 430 the next. Many American’s can’t help but make the comparisons to the financial crisis of 2008. This kind of whipsaw stock trading triggers panic and torpedoes confidence, leading many to abandon stocks altogether. The Dow roared 423 points higher Thursday to 11,143.31 — the 11th-largest gain in the blue-chip index’s history. It follows a 634-point plunge Monday and a 519-point drop Wednesday, the Dow’s sixth- and ninth-largest by points. Each day of this week has seen the Dow Jones at least 400 points, something that happened on only one day in all of 2010.{{more}}The question on the minds of everyone from seasoned traders to average Americans: Is this the new normal? At least for the time being, many on Wall Street say it is.

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