The lingering uncertainty about the world economy on Tuesday led gold prices to surge to record levels and left major indexes on Wall Street searching for direction.  The nearly $1 trillion debt rescue package for troubled European countries announced over the weekend touched off a sharp rally on Monday. But just a day after the euphoria, the markets were unable to sustain the momentum.  In addition, pressure in Asian markets, as well as an unexplained trading event that had precipitated a 1,000-point plunge on Thursday, continued to concern investors.  The Dow Jones industrial average ended the day down 36.88 points, or 0.34 percent, at 10,748.26. The Standard & Poor’s 500-stock index fell 3.94 points or 0.34 percent, to 1,155.79, while the Nasdaq was less than a point higher, at 2,375.31.  Utilities shares rose while materials, energy and financial stocks closed lower. Occidental Petroleum fell 1.34 percent to $83.03, while Goldman Sachs dropped 1.3 percent, or $1.86, to $141.97. The Treasury’s 10-year note rose 4/32, to 100 26/32. The yield fell to 3.52 percent, from 3.54 percent late Monday.  With the euro slipping, investors found refuge in gold and the dollar. Spot gold prices closed at a record high of $1,232.88, up $29.78, while the dollar ended at nearly $1.27 against the euro.  “There is a profound sense of risk in the market and investors are looking to buy their perception of risk-free instruments,” said James R. Steel, a precious metals analyst at HSBC.  Jeffrey A. Nichols, senior economic adviser for Rosland Capital, said that the surge continued a rally in the last few weeks.  “I think the gold market is now being fueled by fear, uncertainty and equity market volatility,” he said, adding that people were viewing “the euro as a currency that no longer really qualifies as a reserve asset. Now it is really a second-rate currency.”  Adding to the uncertain picture in Europe was the political situation in Britain. On Tuesday, Gordon Brown stepped down as prime minister, with David Cameron of the Conservative Party taking over.  “There is still a wait and see attitude to see how the new government is going to shape up,” Mr. Nichols said.  In Europe, the Euro Stoxx 50 index fell 1 percent, after soaring more than 10 percent Monday. In London, the FTSE 100 index fell 0.99 percent. The CAC-40 in Paris was down 0.7 percent but the DAX in Frankfurt was 0.33 percent higher.  “People are still looking favorably at the rescue package, but there are a lot of questions still to be answered,” said Kilian de Kertanguy, a fund manager at Cholet Dupont Gestion in Paris.  In Athens, the Greek government applied to the European Commission for the first 14.5 billion euro, or $18.4 billion, installment of a loan from the European Union and International Monetary Fund, a finance ministry official said. Greece is expected to receive the money early next week, the official said, as well an additional 5.5 billion euros from the monetary fund. The official asked not to be identified as a matter of policy.  John Lonski, chief economist at Moody’s Capital Markets, said traders continued to wonder about the wisdom of adding to the obligations of already heavily indebted countries.  Quincy Krosby, a market strategist for Prudential Financial, said a pullback after Monday’s highs was to be expected.  “Right now you do see that the European Central Bank and the Europeans seem to be determined to stanch the contagion,” she said. “But part of that effort planted the seeds of even more fear,” she added, referring specifically to the re-established Federal Reserve swap facility.  “What needs to be done is the market has to be convinced that the countries, and not just Greece, under the microscope can in fact cut their deficits, that they can in fact live with austerity measures,” Ms. Krosby said.  Bettina Wassener and David Jolly contributed reporting.
Trading was tempered by anxiety over Chinaâs economy, the European bailout plan and trading flaws on Wall Street.