UPDATE 2-Toronto stocks fall on uncertainty over US bailout

Mon Sep 22, 2008 11:41am EDT
 
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*TSX index opens lower after a 7 percent rally on Friday

*Uncertainty over U.S. bailout package prevails

*Materials stocks rise on higher gold, base metals prices

*Tanganyika Oil jumps after it says in talks with buyer

(Adds details)

TORONTO, Sept 22 (Reuters) - The Toronto Stock Exchange's main index stumbled on Monday morning on weakness in energy and financial shares as investors worried about the effects of the proposed $700 billion U.S. financial bailout plan.

The retreat came after news that the two remaining major U.S. investment banks, Goldman Sachs GS.N and Morgan Stanley MS.N, have sought refuge in the arms of the U.S. Federal Reserve and transformed themselves into bank holding companies to survive the financial storm. [ID:nSP4331] [ID:nN13574113]

On Friday, the Toronto market soared on news if the bailout plan -- making its biggest percentage gain since 1987, rising 7.03 percent to 12,912,99 -- but it had some second thoughts on Monday.

"I would say there's still a lot of uncertainty out there as to the rescue package," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.   Continued...