* Gold index at all-time high as metal surges
* Atlas Energy up after Chevron deal news
* Dow down 0.4 pct, S&P off 0.5 pct, Nasdaq off 0.4 pct (Updates to afternoon)
By Caroline Valetkevitch
NEW YORK, Nov 9 (Reuters) - U.S. stocks slipped on Tuesday, as investors took profits after a recent rally and following an all-time high in a gold shares' index.
Last week, stocks rose to their highest levels in two years after the Federal Reserve's announcement of its stimulus plan, which is another round of "quantitative easing," dubbed QE2, and a stronger-than-expected employment report.
Financial stocks, which helped drive gains last week, led the S&P 500's decline. The S&P financial index slid 1.5 percent.
A gold index surged to a lifetime high earlier in the day, but was down 0.3 percent in afternoon trade.
The dollar strengthened in afternoon trade, pushing gold and other commodity prices down, as well as stocks. The dollar has had an inverse relationship with stocks lately.
"If you look at measures of overbought conditions ... It's (where) markets would try to catch their breath," said Steve Goldman, market strategist at Weeden & Co. in Greenwich, Connecticut.
The S&P 500 added 3.6 percent last week, its fifth straight week of gains.
The market's recent strong run higher has pushed the S&P 500 up to near resistance around the 1,228 level, which would retrace 61.8 percent of the decline between its highs in 2007 and the 12-year low in March 2009.
This point, a Fibonacci retracement, is closely followed by technical chartists and often triggers buying or selling.
Investors have seen gold as an inflation hedge following the Fed's announcement last week that it would buy $600 billion in government debt in an effort to stimulate the sluggish U.S. economy, and the view has bolstered commodity shares.
An index of gold and silver miners' shares was trading lower after hitting an all-time high earlier in the day. It was last down 0.9 percent. An exchange-traded fund of gold sharesalso reversed gains and was last down 0.5 percent at $137.10.
The new high shows "people are coming into this area, trying to play catchup," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
The Dow Jones industrial average slipped 45.07 points, or 0.40 percent, to 11,361.77. The Standard & Poor's 500 Index fell 6.35 points, or 0.52 percent, to 1,216.90. The Nasdaq Composite Index dropped 9.30 points, or 0.36 percent, to 2,570.74.
Early in the day, U.S. gold futures hit a record $1,422.10 an ounce. It was a fourth straight day of record levels.
The index of gold and silver shares is up 21 percent since the Aug. 31 close.
Technical charts show the gold and silver shares index is "a little bit ahead of itself, but (that) the longer-term trend looks like it's positive," said Craig S. Peskin, co-head of technical analysis research at MF Global in New York
Deal news supported shares of Yahoo Inc, up 3.4 percent at $17 after a report it may be a takeout target.
Elsewhere on the merger front, Atlas Energy Inc surged 33.6 percent to $42.37 after Chevron Corp said it will buy the U.S. natural gas producer, giving Chevron a stake in the fast-growing Marcellus shale field.
Chevron slipped 1.1 percent to $83.91 and was the top drag on the Dow.
Yahoo shares rose after Jack Ma, founder of Alibaba Group, was approached by private equity investors about taking part in a bid to buy Yahoo, according to a source.
Also advancing, Priceline.com Inc rose 9 percent to $423.36, a day after the online travel agency posted stronger-than-expected quarterly earnings. At least six brokers raised their price targets on the stock. (Reporting by Caroline Valetkevitch; Additional reporting by Rodrigo Campos; Editing by Jan Paschal)