UPDATE 1-Toronto stocks lower, gripped by US credit jitters

Tue Aug 19, 2008 11:13am EDT
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(Adds details)

*Financial services shares fall on more credit fears

*Oil and base-metals miners companies rise

*Mega Brands up after quarterly results

TORONTO, Aug 19 (Reuters) - The Toronto Stock Exchange's main index fell on Tuesday morning, pulled lower by financial-services shares as worries over the credit crisis and the U.S. economic outlook resurfaced.

The heavyweight financial-services sector slipped 1.5 percent on a forecast by JPMorgan Securities that U.S. investment bank Lehman Brothers LEH.N will likely take further writedowns [ID:nBNG259145]. Royal Bank of Canada (RY.TO: Quote) fell 1.4 percent to C$45.94.

The market fallout from the credit crisis is far from over, said John Kinsey, portfolio manager at Caldwell Securities Ltd.

"People have underestimated the severity of it, the depth and breadth," he said. "It pops its ugly head up and bashes the market."

Underpinning the jitters was a U.S. report showing that underlying inflation is gaining momentum, heightening concerns about the health of the economy. For details, see [ID:nN19145257]]   Continued...