Canada Stocks Close Lower; Weak ISM Report Erodes Stocks; Bombardier Lower Despite Purchase Agreement


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Canadian stocks closed lower on Monday starting the month off on a sour note. All sectors were lower, led down by Info Tech and Metal and Mining.

Stocks declined rapidly after the Institute of Supply Management released a worse than expected manufacturing report. On Monday the ISM reported that its manufacturing purchasing managers index for January slumped to a reading of 51.3, its lowest reading since May, though still indicating an expansion of activity. The metric missed a projected 56 and marked a drop from December's 56.5.

Bombardier Inc (BBD-B.TO) is down another 1.5% and nearer to its 52 week low of $3.80 on Monday despite receiving an order for up to eight aircraft for the second successive trading day. Delays with its C-Series aircraft appear to be seriously undermining the stock.

Bombardier Aerospace said Monday that lessor Palma Holding Limited has signed a firm purchase agreement for four dual-class Q400 NextGen aircraft. The agreement, which also includes options for an additional four Q400 NextGen aircraft, follows a letter of intent to acquire the aircraft that Bombardier announced on November 18, 2013. Under a joint venture with Ibdar Bank BSC, Palma intends to lease four of the Q400 NextGen aircraft to Ethiopian Airlines.

This comes after Bombardier said Friday it has received a firm order for eight Global business jets, including three Global 6000, two Global 7000 and three Global 8000 jets, from an undisclosed customer. The transaction is valued at approximately US$537 million, based on the 2014 list price for typically equipped aircraft.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Commodities

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