Canadian stocks fell as U.S. President Barack Obama met congressional leaders at the White House three days before a deadline to avoid the so-called fiscal cliff.
Bank of Nova Scotia fell 0.9 percent and Manulife Financial Corp., the nation’s largest insurer, slipped 0.4 percent. Silvercorp Metals Inc. and Pan American Silver Corp. lost at least 2 percent as the price of the metal declined for the fifth straight week. MEG Energy Corp. dropped 1.7 percent after selling shares to raise C$800 million to fund its 2013 capital budget.
The Standard & Poor’s/TSX Composite Index dropped 57.65 points, or 0.5 percent, to 12,316.12 in Toronto. The equity gauge has gained 3 percent this year, trailing markets in every developed nation in the world except Portugal and Spain.
“This is the way the market is going to be for the next few weeks, at least into mid-January as it looks like they won’t be having a deal in place for Dec. 31,” Bruce Campbell, president of Campbell & Lee Investment Management Inc., said from Oakville, Ontario. “The consensus now is we’re going over, but that’s OK because you can solve it in January and make it retroactive. It’s more of a hill than a complete cliff.”
Obama, who had been negotiating one-on-one with U.S. House Speaker John Boehner, met 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 president is asking leaders to extend tax cuts for annual income up to $250,000, reiterating his Dec. 21 proposal for an interim plan, said an official familiar with the meeting.
Lawmakers are working to avoid more than $600 billion in tax-and-spending changes, known as the fiscal cliff. 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.
Scotiabank slipped 0.9 percent to C$57.43 and Canadian Imperial Bank of Commerce lost 0.5 percent to C$80.55. Manulife fell 0.4 percent to C$13.39 as financial stocks declined. Nine out of 10 industries in the index retreated, with trading volume 57 percent lower than the 30-day average.
Silvercorp declined 2 percent to C$5 and Pan American Silver retreated 2.1 percent to C$18.08. Silver for March delivery slipped 0.9 percent to $29.975 an ounce in New York.
MEG Energy fell 1.7 percent to C$30.91. The company announced it has raised about C$800 million by issuing more than 24 million common shares at C$33 a share.
MEG plans to use the proceeds to help fund its 2013 capital budget, which will be primarily focused on increasing production and capacity at the company’s existing facilities, the company said Dec. 10.
Poseidon Concepts Corp., a Calgary-based company that sells fluid storage tanks for the oil and gas industry, plunged 13 percent to C$1.29 after having its price target cut by analysts at FirstEnergy Capital Corp. and Haywood Securities Inc.
The stock has lost 61 percent in the past two days after yesterday announcing the suspension of future dividends and the formation of a special committee to investigate account writedowns. Poseidon also shuffled its management and board, including the appointment of A. Scott Dawson as interim president and chief executive officer.