It is the Moro Reflex or the Startle Reflex.
When you hold a newborn, and try to sit him upright with your hands gripping her underarms and supporting his neck then try to lower him back gently, the baby will get startled because he feels like he is going to fall. He will throw out his arms and legs, and will pull it back in. This reflex can be triggered by a movement or sound. The baby can also get startled with his own cry.
