European stocks close:

European stocks posted their biggest weekly drop since June amid concern President Barack Obama and Congress will fail to agree on a new budget, triggering $607 billion of automatic tax increases and spending cuts.

Obama began negotiations with Democrat and Republican congressional leaders today. The president said at a press conference on Nov. 12 that Bush-era tax cuts for high earners should expire at the start of 2013. House Speaker John Boehner’s colleagues refuse to raise tax rates.

A report from the EU’s statistics office on Nov. 15 showed the euro area slipped back into a recession in the third quarter as governments imposed tougher austerity measures to narrow their fiscal deficits. Gross domestic product slipped 0.1 percent, its second consecutive quarter of contraction.

Separate releases showed that industrial production in the currency zone dropped the most since 2009 in September, Greece’s economy contracted for a 17th straight quarter and jobless claims rose at the fastest pace in more than a year in the U.K.

National benchmark indexes fell in every western-European market except Greece and Iceland. France’s CAC 40 lost 2.4 percent, the U.K.’s FTSE 100 slid 2.8 percent and Germany’s DAX declined 3 percent. Spain’s IBEX 35 Index slipped 0.6 percent amid speculation the country will soon request a bailout from the European Union.

Vodafone slid 5.9 percent after the telecommunications operator also reported a 1.4 percent decline in service revenue in the second quarter, its first drop in 10 quarters.

Zurich Insurance Group AG lost 5.2 percent after Switzerland’s biggest insurer reported on Nov. 15 a 62 percent drop in third-quarter profit following a $550 million writedown. Net income missed analysts’ estimates.

Hennes & Mauritz AB retreated 4.7 percent after Europe’s second-largest clothing retailer said on Nov. 15 that sales at stores open a year or more slid 5 percent last month, missing some analysts’ estimates.