Stocks rallied Aug. 8, with the Dow Jones industrial average up more than 300 points -- a jump of 2.65% -- and the Standard & Poor's 500-stock index gaining 2.4%.

A rally like that might look like a decisive move higher, but this summer it seems almost routine. In the past 10 days alone, the Dow has seen triple-digit swings up or down on seven days, including Aug. 5, when the blue chip benchmark dropped 332 points.

Laid out on a chart, the summer's stock movements look like the teeth of a saw: repeated, sharp moves up, then down, then up again.

Investors Are Stumped Despite the wild ride, stocks have gone nowhere in the past six weeks. More than a week into August, the S&P 500 trades almost exactly at the same level as late June.

"It's crazy," says Dave Rovelli, managing director for equity trading at Canaccord Adams. What's driving this wild ride? "I don't think anybody knows what to do," he says.

Many long-term investors seem to be leaving their money on the sidelines, while they waver between optimism and pessimism. Meanwhile, short-term traders jump at every piece of news, pushing the market hard in one direction for a day or less, says Jerry Webman, chief economist at OppenheimerFunds.

Lifting investors' spirits every few days have been frequent drops in the price of oil. A month ago, crude oil was trading above $147 per barrel. On Aug. 8, it settled just above $115 per barrel.

Yet the persistent financial crisis continues to weigh on the market. After reporting huge losses, three giant financial firms saw shares plunge on three successive days: Mortgage financier Freddie Mac (FRE) dropped 19.3% on Aug. 6; insurer AIG (AIG) fell 18% on Aug. 7; and Fannie Mae (FNM) fell 9% on Aug. 8. Now that's volatility.

The stock market tends to look ahead to the future -- but that future's hazy now.

An Economic Turning Point The U.S. and world economies seem to be at "turning points," Webman says. It's hard to grasp the complexities of the financial system's distress or the stress on the world economy. "We are seeing things that we don't know how to find past models for," Webman says.

In the U.S., the economy is weak -- but how weak and for how long? "If we're going to come out of the recession in six months, you want to be buying stocks now," Rovelli says.

Brian Gendreau, investment strategist at ING Investment Management, is one of the many on Wall Street who have taken a wait-and-see approach to the market this summer. Since oil prices are very hard to predict, he sees it as "very dangerous" that "the market [was] driven by oil prices and nothing else." On other fundamental measures, there are also big question marks this summer. The current economy seems weak, but the outlook for corporate earnings is "surprisingly good," Gendreau says, and the economy may improve in 2009.