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Stocks Unnerved by Mad Cow

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  • Stocks Unnerved by Mad Cow

    Stocks Slip on Mad-Cow Disease Worries

    NEW YORK — Stocks slipped Wednesday on a shortened pre-Christmas session as the discovery of a suspected case of mad cow disease in the U.S. took a toll on beef and restaurant stocks.



    In late morning trading Wednesday, the blue-chip Dow Jones industrial average (search) was down 22 points at 10,318 while the technology-packed Nasdaq Composite Index (search) was down 2 points at 1,972. The broader Standard & Poor's 500 Index (search) was down 1 point at 1,094.

    Food producers and retailers saw declines after eight nations halted U.S. beef imports on news that a cow at a farm near Yakima, Wash., had tested positive for mad-cow disease (search). Fears about the brain-wasting disorder, which can be contracted by people who eat tainted meat, have prompted the massive slaughter of entire herds in Europe.

    McDonald's (MCD) topped the New York Stock Exchange's (search) most active list and led the blue-chip Dow down with a tumble of more than 6 percent. The sell-off in its shares wiped out about $2 billion in market capitalization.

    "In the short term, I'd expect selling in some food and restaurant stocks as people sell first and ask questions later," said Jack Caffrey, equity strategist at JP Morgan Private Bank. "Then after a few hours or days, people will realize it's an overreaction and become more discriminating."

    McDonald's lost $1.40 to $23.88 and Wendy's International Inc. (WEN) was down $1.91 at $37.75. Tyson Foods Inc. (TSN) was down 79 cents at $13.19 and ConAgra Foods Inc. (CAG) shed 35 cents to $26.05.

    Some traders said investors could take advantage of any weakness in the market and move in to buy cheaper shares.

    "If we get crazy down, you are going to see buyers coming in," said Angel Mata, managing director of listed equity trading at Legg Mason Wood Walker. "Anything is possible on a day like today, just because there is not going to be any liquidity and they can shift stocks up and down."

    Some sectors gained on the news. The nation's largest egg producer, Cal-Maine Foods Inc. (CALM), was up $2.35 at $34.25. Smaller biotech firms that develop technologies to detect and treat disease also rose, including Paradigm Genetics, Inc. (PDGM), which was up 26 cents at $1.50.

    DirecTV parent Hughes Electronics (GMH) was down 60 cents at $16.30 after J.P. Morgan initiated coverage with an "overweight" rating, meaning analysts recommend investors buy heavily. Federal regulators approved News Corp.'s (NWS) $6.6 billion takeover of DirecTV, the nation's largest satellite television provider, last Friday.

    News Corp. is the parent company of the Fox News Channel, which operates FOXNews.com.

    Memory chip maker Micron Technology Inc. (MU) was up 48 cents at $13.64 after surprising analysts with a first-quarter profit, reflecting an improved market for computers, cell phones and networking gear.

    The government said new orders for long-lasting U.S. manufactured goods fell unexpectedly in November, dropping at the steepest rate in more than a year. Orders fell 3.1 percent -- defying expectations for a 0.8 percent rise. It was the biggest monthly orders decline since a 6 percent tumble in September 2002.

    The Russell 2000 index, which tracks smaller company stocks, was down 1.80, or 0.3 percent, at 553.23.

    Overseas, Japan's Nikkei stock average finished 0.01 percent lower Wednesday. In afternoon trading in Europe, France's CAC-40 rose 0.3 percent and Britain's FTSE 100 was up 0.1 percent. The German stock market was closed.

    Reuters and the Associated Press contributed to this report.

    http://www.foxnews.com/story/0,2933,106601,00.html
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