* Gold index at all-time high
* Atlas Energy up after Chevron deal news
* Dow down 0.3 pct, S&P off 0.3 pct, Nasdaq off 0.2 pct (Updates to midday, changes byline)
By Caroline Valetkevitch
NEW YORK, Nov 9 (Reuters) - U.S. stocks edged lower on Tuesday, even as a gold index surged to all-time highs with investors again pouring money into the safe-haven commodity.
Gold prices hit record highs for the fourth day in a row. The metal has been viewed as an inflation hedge by investors following the Federal Reserve's announcement last week that it would buy $600 billion in government debt in an effort to stimulate the sluggish U.S. economy.
An index of gold and silver miners' shares gained 1.9
percent and hit an all-time high. Shares of Barrick Gold
"Gold is the vehicle investors are using to protect their currency and inflation exposure," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
But commodity prices in general have risen so much they could be near a point where they are hurting the economy and profits, he said, adding: "It's going to have very negative ramifications for the rest of the economy and and the market if it's not corrected."
Last week, stocks rose to their highest levels in two years after the Fed'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 lead gains last week, led the S&P 500's decline. At midday on Tuesday, the S&P financial index was down 0.9 percent.
The market's 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.
Deal activity also was supportive for stocks, with Yahoo Inc jumping 4.9 percent to $17.25 after a report it may be a takeout target.
The Dow Jones industrial average fell 36.25 points, or 0.32 percent, to 11,370.59. The Standard & Poor's 500 Index dropped 3.66 points, or 0.30 percent, to 1,219.59. The Nasdaq Composite Index slipped 4.16 points, or 0.16 percent, to 2,575.89.
Elsewhere on the merger front, Atlas Energy Inc surged 33.7 percent to $42.40 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 8.7 percent to $422.46, 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; Editing by Jan Paschal)