[yes, I own shares of McDonald's - Will] http://biz.yahoo.com/rb/010125/c1.html Thursday January 25, 5:13 pm Eastern Time McDonald's Shares Fall on Mad Cow Concern By Deborah Cohen CHICAGO (Reuters) - Stock in fast-food giant McDonald's Corp. (NYSE:MCD - news) fell more than 4 percent on Thursday, following reports that some Texas cattle had been quarantined by the U.S. Food and Drug Administration on suspicion that feed safeguards against mad cow disease had been violated. Shares in the maker of Big Macs, Quarter Pounders and other beef hamburgers fell $1-1/4 to $29-9/16 on heavy volume of 17.7 million shares in New York Stock Exchange trading. The shares, which earlier fell as low as $28-5/16, have a 52-week trading range of $26-3/8 to $41-7/16. U.S. health regulators said on Thursday they had quarantined some Texas cattle while officials investigate whether a feed mill violated rules designed to spread mad cow disease, also known as bovine spongiform encephalopathy. Scientists believe cattle can contract BSE if they eat the remains of other infected animals. ``These cattle have absolutely no connection to McDonald's,'' said company spokesman Jack Daly, who stressed that McDonald's maintains high-quality standards for its ingredients. Added company spokesman Walt Riker: ``We have state-of-the art, best-in-industry quality controls, and this herd of cattle is so removed from anything that is McDonald's. The story has nothing to do with us.'' McDonald's stock decline comes amid heightened anxiety over mad cow disease and concern that an outbreak in Europe, linked to tainted feed, could spread to non-European countries. Shares of other restaurant companies dependent on the U.S. beef supply also fell. Stock in Dublin, Ohio-based Wendy's International Inc. (NYSE:WEN - news) fell $1-1/8, or more than 4 percent, to $24-9/16 in Thursday trading on the New York Stock Exchange, while shares of Tampa, Florida-based Outback Steakhouse Inc. (NYSE:OSI - news) fell $1-3/16, or nearly 5 percent, to $22-13/16. McDonald's said on Wednesday that European sales in its fourth quarter fell 10 percent to $2.21 billion from $2.45 billion a year ago, contributing to a 7 percent drop in the period's net income. Hamburger sales in Europe have been under pressure since November, following the recent discovery of several cases of the brain-wasting disorder on the Continent. ``It's very easy for the mad cow scare to psychologically snowball,'' said Tim Ghriskey, head of value investing for Dreyfus Corp., where McDonald's is a core holding. ``If (mad cow) does go beyond the limited geographic area, McDonald's is certainly leveraged toward beef.'' To date, there have been no cases of mad cow reported in the United States. The National Cattlemen's Beef Association has called a meeting next week of feed industry and government officials to underscore the need for ``zero tolerance'' of any mad cow disease threat to the United States. McDonald's shares were further pressured on Thursday when several investment firms, including Merrill Lynch and Salomon Smith Barney, cut their earnings forecasts for the stock, citing concern over the company's international business. Besides mad cow, investors remain fearful about further fluctuations in foreign currencies, especially the euro. ``You have some operational pressures on the company,'' said Edward Jones analyst Patrick Schumann. ``Mad cow is not helping the overall perception.'' Copyright © 2001 Yahoo! Inc. All rights reserved. Copyright 2001 Reuters Limited. All rights reserved.
