020333 Foot-And-Mouth Scare Hurts Meat Firms

Chicago - Shares of several meat processing companies and restaurants fell on news that five cattle in Kansas were being tested after showing symptoms similar to foot-and-mouth disease.

There as no evidence yet of the virulent disease and the testing is routinely done for sick animals, a spokesman for the U.S. Department of Agriculture said. CNBC reported Wednesday afternoon that the tests on the cattle were negative, though the USDA said results would not be out until Wednesday night.

"It's obviously a concern for investors and consumers," Christine McCracken, agribusiness analyst at Midwest Research said. But she added that fragmentation in the U.S. cattle industry makes it unlikely that the disease could spread throughout the industry.

An outbreak of the disease in Britain last year prompted the slaughter of thousands of animals and caused billions of dollars of losses to farmers.

Shares of poultry and beef processing giant Tyson Foods Inc. were down 32 cents, or 2.5 percent, at $12.43, after falling to as low as $12 on the New York Stock Exchange. Pork and meat processor Smithfield Foods fell 19 cents to $24.65, after being up earlier in the day. ConAgra Foods Inc. , which owns a fresh beef and pork operations, was down 1.3 percent, or 30 cents, to $22.54.

Several restaurant company stocks were also lower, including McDonald's Corp. , down 1.6 percent, or 44 cents, at $27.91, after reaching as low as $27.35 and Outback Steakhouse Inc. , down 1.4 percent, or 49 cents, at $33.65, after reaching as low as $32.60. Hamburger chain operator Wendy's International Inc. was down 8 cents at $31.55, after falling to as low as $30.80. The stock had hit a 52-week high earlier in the day.

"So far there is no proof, but any time you have this kind of news and the stock has run up a lot recently, there's going to be some profit-taking," said Tony Howard, an analyst at brokerage Hilliard Lyons "Outback and Wendy's have all hit new highs recently, and people are more apt to take profits when there's potentially negative news."

Meanwhile, SureBeam Corp. , which makes technology that removes bacteria from food, was up 9 percent, or 55 cents, at $6.20, and Food Technology Service Inc. . which operates a food irradiation facility, was up 8 percent, or 11 cents, at $1.22, both on Nasdaq.

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