NEW YORK – Just how turbulent is the stock market? More than half a trillion dollars in paper gains were made and lost within just two weeks in September. The S&P 500 jumped 5 percent in the week ending Sep. 16, the second best week this year. The next week it plunged 6 percent, the second worst week this year.

The wild swings have made many wary of putting money in the stock market. “It’s like an elevator with only two buttons,” said Jeffrey Sica, president of Sica Wealth Management. “If you see one button says `surge’ and the other says `plunge,’ you’re not going to get on the elevator.”

In market-speak, it’s called volatility: Large jumps followed by deep dives, within the course of a week or sometimes the same day. The surge in volatility since early August has been blamed for preventing companies from going public and scaring people out of stocks. Some think that even if Europe resolves its debt crisis, large price swings are here to stay.

In August, many put part of the blame for that month’s volatility on the summer vacation season. Come September, they said, more people will be at their desks buying and selling, making it harder for large orders to rattle the market when trading volumes are thin. That turned out to be half right: Trading volume has picked up since Labor Day, but the stock market looks far from calm.

“What was wrong with the vacation idea is that Europe didn’t get any better when people got back to work,” said Nick Colas, chief market strategist at BNY ConvergEx Group. “People are still focused on the same clear and present dangers.”

To get an idea how volatile the market has been, consider:

• The Dow Jones industrial average has gained or lost more than 200 points in a trading day 16 times since the start of August. Six of those days came in September. In the first seven months of the year, that happened just four times.

• The long-term trend is toward more volatility. Judging by the number of times in a year the S&P 500 swung 2 percent or more in a single day, markets are much more likely to have large leaps up or dives down, according to S&P’s equity research group. Swings of 2 percent occurred an average of five times a year from 1950 to 1999. It’s already happened 20 times this year, with three months left to go.

The heavy turbulence that started in August is the main reason why no company has managed to pull off an initial public offering since the Chinese online video website Todou Holdings went public Aug. 16. The backlog of companies waiting to debut in an IPO has never been larger.

“All the volatility has made for an unfavorable IPO environment,” said Claude Courbois, managing economist at Nasdaq OMX’s research department. “An IPO is your coming out party, a chance to tell your story. You don’t want an enormous amount of uncertainty surrounding it.”

Analysts say it’s also the chief reason Americans are fleeing the stock market as if it’s 2008 all over again. Retail investors pulled $36 billion out of U.S. stock funds in August, according to preliminary data from the Investment Company Institute. That’s second only to the $47 billion withdrawn from U.S. stock funds at the height of the financial crisis in October 2008.

“The swings themselves have eroded the confidence of investors,” said Jeff Kleintop, chief market strategist at LPL Financial. “It’s the sign of a market and an economy not on sound footing.”

Sica, the wealth manager, told his clients to leave no more than 10 percent of their savings in stocks at the end of May on the belief that markets would slide as the Federal Reserve’s efforts to help the economy came to an end in June. The stock market’s drop since then has failed to lure Sica and his clients back in. In fact, he’s told his clients to get the rest of their money out.

In the past, a rally like the 5 percent one in the week ending Sep. 16 would be enough to cause Sica’s phone to ring with calls from clients wanting to shift more money into stocks. “They’d have the sense their missing out on something,” Sica said. In recent weeks, stock market surges are followed by clients calling to say “`Please keep me out,’” he said.

“This is the first time in 20 years that I’m totally out of stocks, unfortunately. Just because something declines, it doesn’t mean it will ever come back.”

NEW YORK – About 80 people have been arrested as demonstrators who were camped out near the New York Stock Exchange marched through lower Manhattan.

The “Occupy Wall Street” protest is entering its second week. Demonstrators said Saturday that they are protesting bank bailouts, the mortgage crisis and Georgia’s execution of Troy Davis.

At Manhattan’s Union Square, police tried to corral the demonstrators using orange plastic netting. Some of the arrests were filmed and activists posted the videos online.

Police say the arrests were mostly for blocking traffic. Charges include disorderly conduct and resisting arrest. But one demonstrator was charged with assaulting a police officer. Police say the officer involved suffered a shoulder injury.

Protest spokesman Patrick Bruner criticized the police response as “exceedingly violent” and said the protesters sought to remain peaceful.

NEW YORK (Reuters) – About eight people besides a Taiwan-born technology consultant who is on trial for insider trading provided stock tips to Barai Capital Management, a former employee of the hedge fund testified on Tuesday.

The names of other consultants or employees of semiconductor companies came out in cross-examination of a witness testifying against Winifred Jiau, the only person to go to trial so far in the so-called expert network branch of a U.S. crackdown on suspicious Wall Street trading.

Jiau’s lawyer, Joanna Hendon, mentioned the names to show the jury that her client may not have been the only person with access to corporate secrets who is alleged to have leaked detailed earnings information to hedge funds in exchange for money.

A spokeswoman for the office of the Manhattan U.S. Attorney declined to comment on whether any of the people identified in Manhattan federal court were in any way part of the investigation.

At least 10 people charged, including witness Jason Pflaum, have pleaded guilty to criminal charges since last year’s probe was announced of so-called expert network firms that match investment managers with public companies. Prosecutors say the defendants abused their fiduciary duties and traded or helped others trade illegally on confidential company information.

Pflaum was a research analyst at the hedge fund until the end of last year and is assisting the FBI and prosecutors in the investigation.

DESTROYED FILES

Pflaum also testified that he destroyed the computer files or printouts of three people who had provided his boss, Samir Barai, with secrets that made the fund between $1 million and $5 million.

“The catalyst was the Galleon case when that broke,” Pflaum said, referring to the October 2009 arrest of Galleon hedge fund founder Raj Rajaratnam who was convicted last month in the same courthouse on insider trading charges. Rajaratnam was the central figure in that branch of the government’s investigation.

Pflaum testified that he and Barai discussed how there was “more sensitivity about contacts we had that were over the line.” Barai, said Pflaum, “wanted to make sure I got rid of them (the files).”

Barai pleaded guilty to criminal charges on May 27 and admitted conspiring with Jiau, 43, one-time consultant with Primary Global Research expert networking firm based in California. She has been denied bail after trial judge Jed Rakoff agreed with prosecutors that she might flee.

Pflaum also told the jury, which was chosen for Jiau’s trial on June 1, that he and Barai had contact with John Kinnucan, the head of an Oregon research company who late last year publicly refused to help the government in its probe.

The former Barai analyst testified that he was part of joint phone calls between Samir Barai and Kinnucan and knew of a series of emails that were exchanged between them.

“I don’t recall him giving us any great information,” Pflaum said.

Kinnucan’s lawyer, Nathaniel Burney, contacted to comment on Tuesday’s testimony mentioning his client, said: “John Kinnucan never conveyed any inside information.”

The case is USA v Winifred Jiau et al, U.S. District Court for the Southern District of New York, No. 11-00161.

(Reporting by Grant McCool, editing by Matthew Lewis)