NEW YORK — Financial markets resumed their pullback Tuesday as investors worried that lawmakers were losing the sense of urgency seen last week when the government proposed a massive bailout for financial institutions as a way to dislodge clogged credit markets.
Investors grew fearful that top economic officials updating Congress about efforts to work out a $700 billion financial rescue plan were facing a greater degree of second-guessing from lawmakers than had been expected. The Dow Jones industrials, up for much of the session, were down more than 100 points by early afternoon.
Still, trading appeared more orderly than Monday, when investors rushed into hard assets like oil and gold. Meanwhile, demand remained for 3-month Treasury bills, considered the safest short-term financial asset, while the dollar regained ground after being hard hit Monday.
After days of intense gyrations in financial markets, investors remain anxious over whether the plan to absorb billions of dollars in banks’ bad mortgages and other risky assets will help steer the economy onto more solid footing or whether it will introduce another set of problems such as rising inflation.
Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commission Chairman Christopher Cox testified before lawmakers, who are working with the Bush administration to complete the details of the bailout.
But traders grew nervous as the officials faced questions about whether the government’s planned response was too big in scope. Sen. Chuck Schumer, D-N.Y., for example, asked whether $150 billion might be adequate to get the program started if more were promised.
The market remains uncertain about how long it will take for the bailout plans to take effect, and when they do, how effective they will be.
‘‘There’s skepticism about whether the $700 billion number is the right number,’’ said Jim Herrick, manager and director of equity trading at Baird & Co.
Bernanke told the Senate Banking Committee that Congress risks triggering a recession if it doesn’t act on the plan. He said inaction could leave a range of businesses unable to borrow the money while consumers could find it impossible to finance big purchases like cars and homes.
Financial markets showed uneasiness as investors listened to the testimony, but not the panic that marked Monday’s trading.
The market for short-term Treasurys appeared stable, though not relaxed. The yield on the 3-month T-bill rose to fell to 0.85 percent from 0.88 percent on Monday; last week, it was around zero after investors flooded money into T-bills as the credit markets seized up. That spurred the Bush administration to formulate its debt buyout plan.
The yield on the benchmark 10-year Treasury note, which trades opposite its price, fell to 3.81 percent from 3.85 percent late Monday.
The dollar, whose decline Monday drove some of the frenetic trading in other markets, was higher against other major currencies, while gold prices declined after Monday’s big advance.
‘‘We had what felt like a bottom a few days ago, and I think we’re going to retest the lows,’’ Herrick said.
In early afternoon trading, the Dow fell 104.81, or 0.95 percent, to 10,910.88 after having risen more than 125 points in the early going. On Monday, the Dow fell more than 370 points as investors scrambled for the safety of hard assets like oil and gold.
Broader stock indicators also dropped after pushing higher at times. The Standard & Poor’s 500 index fell 14.17, or 1.17 percent, to 1,192.92, and the Nasdaq composite index fell 16.20, or 0.74 percent, to 2,162.78.