Share prices move up and down all the time. Sometimes, there's more uncertainty in the global economy causing them to fluctuate more. For instance, European debt crisis, slowdown of US economy, jitters in the developing world (esp. India) could be causing more volatility this year.

Coming to your second question, share prices are forward looking. In theory, price of a share is the NPV (net present value) of all future payoffs as a result of holding it. Let's examine what these payoffs are. To examine this, let's look at when a shareholder gets paid. When a firm generates revenues, the suppliers and employees get paid first and debt holders get paid after that. Whatever remains goes into the profit pool, which is then distributed to shareholders or ploughed back into the business. So theoretically, shareholders have a claim on the net profits of the company over the course of many years.

Now, since these are future payoffs, no one knows what the exact payoff is going to be. The forecasts vary widely depending on who is analyzing the stock. Hence the value of a stock as seen by person A may be very different from the value as seen by person B. Hence different people pay different prices for the same stock. And depending on, if more people are betting on or against the stock, the price moves up or down.

The above it just one dimension and this is a rational dimension. However, markets are prone to irrationality and herd mentality some times and share prices become volatile without any apparent reason.

All in all, share prices follow something like a random path, which is highlighted in the random walk hypothesis.