UPDATE 2-Toronto stocks tumble on financials, Nortel

Wed Sep 17, 2008 11:48am EDT
 
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*Nortel plummets 40 percent after cuts full-year outlook

*Petro-Canada falls after it says oil sands costs to rise

*Gold miners climb as bullion spikes on safe-haven buying

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TORONTO, Sept 17 (Reuters) - The Toronto Stock Exchange's main index retreated on Wednesday as investor fears over the health of the U.S. financial system lingered and Nortel Networks Corp NT.TO shares plunged after it cut its revenue forecasts and said it was looking to sell one of its businesses.

Concerns over the U.S. financial system lingered despite a $85 billion U.S. government rescue plan on Tuesday for insurer American International Group (AIG.N: Quote) to stave off its bankruptcy. For details, see [ID:nN13574113].

Investors worried the bailout won't be enough to stem the turmoil that has caused a meltdown in global markets. As well, U.S. stocks opened lower as a rise in inter-bank lending rates added to concerns of credit constraints in the global financial system.

"Everybody is still concerned about the financial infrastructure of the United States," said Joe Ismail, technical analyst at Maison Placements Canada.

"Now they've been bailed out there is still concern about how it's all going to unfold."   Continued...