UPDATE 3-Toronto stocks falter as credit woes weigh

Tue Aug 12, 2008 5:26pm EDT
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* TSX index slips lower as banks fall on credit woes

* Rally by gold producers lifts materials sector

* Timminco falls after disappointing results

By Leah Schnurr

TORONTO, Aug 12 (Reuters) - The Toronto Stock Exchange's main index closed lower on Tuesday as financial shares fell on worries over more losses related to the credit crunch, offsetting a rebound by gold producers.

Bay Street's financials were caught up in more woes out of the United States after JPMorgan Chase (JPM.N: Quote) said it has accumulated $1.5 billion of losses so far this quarter on mortgage-related assets.

The news stoked concerns of more pain yet to come out of the U.S. financial crisis, and in Toronto National Bank of Canada (NA.TO: Quote) slid 2.8 percent.

"What it boils down to in the big picture is we've had a liquidity boom for 20-odd years," said Levente Mady, broker at MF Global Canada in Vancouver.   Continued...