Why is my mood dictated so much by how well my research is going?
Does anyone else experience this?


Yes, I'm pretty sure we all do to some extent, and that it's one of the defining characteristics of being a researcher that you get so emotionally involved in your work and are so passionate about it that it has that effect. It can be both a curse and a blessing (see the fantastic question linked to by jakebeal in the comments). Hopefully if you are talented and work hard, it will be the latter more often than the former.

As for how to manage it:


get used to it (I mean that literally, not as a sarcastic admonition) - if you plan a career in academia there will always be ups and downs of this sort. At some point one learns to be patient and not to freak out every time the research isn't going great.
Always have other more "normal" work to do, like teaching, that can help you feel like you're doing something worthwhile even during those times when you're stumped with your research.