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Shock waves from the latest outbreak of mad-cow disease are reverberating through the markets, but the impact is expected to be short-lived.

McDonald's Corp. tumbled 5.2 per cent on the New York Stock Exchange Wednesday as investors dumped more than 23 million shares. Wendy's International Inc. fell 4.7 per cent, meat processors Tyson Foods Inc. slipped 7.7 per cent and Canada's Maple Leaf Foods Inc. dropped 1.9 per cent.

More than eight countries -- from Japan to South Korea and Mexico -- shut their borders to U.S. beef Wednesday, helping to send the U.S. dollar to record lows against the euro, while economists weighed the impact that mad-cow disease would have on the $175-billion (U.S.) beef industry and a U.S. economy that is slowly emerging from a long slump.

There was panic selling of beef stocks Wednesday, but most industry experts doubted the impact would last long. They expect a short, sharp slump as investors flee beef restaurants and meat processors, followed by a quick rebound as the panic evaporates.

"I think we'll see some sort of knee-jerk reaction," said Mike Smith, restaurant analyst at Oppenheimer & Co. "You could have some impact maybe until the end of January."

Leonard Teitelbaum, a food analyst with Merrill Lynch Pierce Fenner & Smith Inc., doubts there will be much impact once the initial flurry of excitement is over. "We would suspect the impact on [food company]earnings should be minimal," he said.

Several analysts pointed out that mad-cow disease was found Tuesday in a single dairy cow on a lonely farm south of Yakima, Wash. U.S. authorities have rushed to isolate the farm, hoping to limit the spread of the disease.

Some analysts even see a silver lining in mad-cow disease. One company that rose sharply Wednesday morning was Bio-Rad Laboratories Inc., a California scientific company that makes diagnostic tests for mad-cow disease, or bovine spongiform encephalopathy. Shares of that company jumped 20 per cent on the American Stock Exchange to $59.82, just short of the 52-week high of $62.85. Volume was a heavy 2.6 million shares.

The pork and poultry industry perked right up Wednesday morning as investors took their business out of beef and into other meats. One of the prime beneficiaries was pork processor Geo. A. Hormel & Co. -- makers of Spam luncheon meat -- which rose by 15 cents on the New York Stock Exchange Wednesday to $24.46.

Some analysts go so far as to suggest a buying opportunity for investors as the fast-food industry benefits from an expected 20-per-cent drop in the price of beef. "This could be an even more compelling entry point for McDonald's," David Palmer, an analyst with UBS Securities LLC in New York, wrote in a note. "We would also view this positively for Wendy's."

He expects fast-food stocks to plunge on a knee-jerk reaction to news of the disease, making them more affordable for investors. The price of beef will fall sharply as importing countries close their borders to U.S. beef, giving fast-food chains a windfall cut in their costs.

"The negative publicity will likely be fleeting, and therefore the consumer response minimal," Mr. Palmer added.

Mitchell Speiser, an analyst with Lehman Brothers Inc., is even more optimistic. "Any sharp corrections in beef-related stocks . . . will prove to be a huge opportunity," he said in a market letter sent out early Wednesday morning.

Many industry experts pointed to Canada's experience with mad-cow disease last summer, saying they expect the immediate panic to blow over soon.

"We didn't notice any impact on our restaurants at all," said Ron Christianson, spokesman for McDonald's Restaurants of Canada Ltd. in Toronto. "Consumption didn't drop [when mad-cow disease appeared in Canada last May] There was no change to the product mix."

Like officials for Wendy's, he said McDonald's had no connection with the diseased Yakima dairy cow. Moreover, he said McDonald's Canada buys all its beef in Canada.

Several analysts noted that fast-food chains have cut their dependency on beef, further protecting them from swings in consumer buying habits. McDonald's has adopted chicken, while Wendy's has moved heavily into salads.

Meat processors were hit hard on the stock markets Wednesday, but they expect to recover quickly. "We don't expect much impact," said Lynda Kuhn, a spokeswoman with Maple Leaf Foods of Toronto, Canada's largest meat company.

She said Canadian consumers showed little more than a fleeting interest in mad-cow disease when it struck Canada last May. Maple Leaf stock fell for a few days and then bounced back to normal levels. Beef consumption remained high with little movement to poultry.

"People soon realize that we are almost exclusively in pork and poultry," Ms. Kuhn said, adding that Maple Leaf switched from beef to pork and poultry many years ago. It still sells a few beef hot dogs, but most of that meat is imported from Australia.

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