Canada Stocks Fall as Banks Slip Ahead of U.S. Budget Deadline

Canadian stocks fell as U.S. President Barack Obama summoned congressional leaders to a White House meeting three days before a deadline to avoid the so- called fiscal cliff.

Bank of Nova Scotia retreated 0.4 percent and Manulife Financial Corp., the nation’s largest insurer, slipped 0.7 percent. Silvercorp Metals Inc. lost 1.2 percent as the price of the metal headed for a fifth straight weekly decline.

The Standard & Poor’s/TSX Composite Index dropped 37.41 points, or 0.3 percent, to 12,336.36 at 10:30 a.m. in Toronto. The equity gauge has gained 3.2 percent this year, trailing markets in every developed nation in the world except Portugal and Spain.

Obama, who had been negotiating one-on-one with House Speaker John Boehner, will meet today with Republicans Boehner and Senate Minority Leader Mitch McConnell, and Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats. The meeting will be held at 3 p.m. Washington time.

U.S. lawmakers are seeking to avoid more than $600 billion in spending cuts and tax increases that are just days away from taking effect. Failure to avert the fiscal cliff will probably send the U.S. into a recession in the first half of the year, according to the Congressional Budget Office.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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