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.



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