By ,
Published January 13, 2015
Many fast food chains saw their stock prices slip in late trading Friday after the U.S. Department of Agriculture reported the second case of mad cow disease (search) in the United States.
The sell-off was not nearly as severe as Dec. 24, 2003, however, when the first case of the brain-wasting mad cow disease sent many restaurant stocks into a tailspin.
On Friday, shares in those companies followed the rest of the market lower and dipped further after the USDA (search)'s announcement, which came about 90 minutes before the close of trading.
McDonald's Corp. (MSFT) shares dropped about 1 percent to $28.28, near its low for the day. Wendy's International Inc. (WEN) closed down less than 1 percent to $46.53 and Outback Steakhouse Inc. (OSI) dropped nearly 1 percent to close $45.05, a few cents off its Friday low.
Jack in the Box Inc. (JBX) and Applebee's International Inc. (APPB) also closed lower, while Bob Evans Farms Inc. and drive-in burger chain Sonic Corp. (SONC) posted gains. Shares of Tyson Foods Inc. — the world's largest meat processing company — lost only one-half percent, down 10 cents to $18.
The USDA on Friday confirmed mad cow disease in what appears to be the first case in a U.S.-born animal. Officials would not confirm the cow's origin but said it likely was not imported and its meat never entered the food chain.
On news of the first-ever case of U.S. mad cow disease 18 months ago, many restaurant chains saw their share prices drop 5 percent or more, but in most cases quickly rebounded to pre-announcement levels.
Morningstar analyst Carl Sibilski, who covers McDonald's and other fast food companies, said people generally have confidence in the government to protect the nation's food supply.
"Consumers have shown that unless there's evidence that shows (mad cow) has gotten into the food supply or someone has gotten sick from it, there's not going to be any mad dash away from beef," he said.
Wendy's, Tyson and other food companies on Friday stressed that the food supply was not affected and that the government's safeguards against the disease, officially called bovine spongiform encephalopathy, or BSE, are working.
"If anything, it shows the integrity of the system," said Wendy's spokesman Denny Lynch.
Terry Stokes, chief executive officer of the National Cattlemen's Beef Association (search), said the finding "is not a threat to the health of the U.S. cattle herd."
The USDA's announcement came just after the close of trading on the Chicago Mercantile Exchange (search), where beef futures trade. June beef futures closed at $82.17.
Sandy Sanders, 43, said while dining at a McDonald's in Columbus, Ohio, Friday afternoon reports of mad cow disease don't bother her.
"Everything has some kind of bacteria," she said.
https://www.foxnews.com/story/fast-food-shares-drop-on-mad-cow-news