Skip navigation

NRN Stock Index post 6.7% gain Monday

NEW YORK The Nation’s Restaurant News Stock Index on Monday posted its largest one-day percentage gain this year, up 6.7 percent from Friday’s close, in a swing that followed the broader market’s surge. Still, there is investor and analyst concern that the sector’s pressures, including increased commodity costs and slowed consumer traffic, will only get worse before getting better.

As the broader market indexes posted double-digit gains Monday, restaurant sector stocks posted a relatively anemic performance that analysts blamed on low expectations for third-quarter results, which are scheduled during the next three weeks.

The reports are expected to be filled with decreased profits, or lower-than-expected profit growth, and an even further pull back in annual expectations, as already seen from Brinker International Inc., which reduced its annual guidance last week. Also, as a sector dependant on discretionary spending, analysts are concerned that increases to unemployment levels and continued economic troubles would further depress the sector.

“More recently, company specific fundamentals were replaced with global market concerns further pressuring the restaurant and retail discretionary landscape,” said restaurant securities analyst Jeff Bernstein at Barclays Capital. “We expect the unsettled global markets to remain center stage, leaving restaurant stocks range-bound and more effective as short-term trading vehicles.”

The financial markets in general were boosted Monday by investor confidence in a worldwide governmental effort to shore up the U.S. banking system and unlock liquidity, reports said. The Dow Jones Index and the Standard & Poor’s 500 Index posted their largest one-day gains since the 1930s. The market’s volatility — evidenced by last week’s deluge and Monday’s partial recovery — may continue for some time as the markets work out Wall Street’s new landscape, pundits suggested. Another wild swing could be seen on Tuesday, when the credit markets reopen after the Columbus Day bank holiday. 

The NRN Stock Index rose 6.7 percent to close Monday at 1,015.12. Leaders included Panera Bread Co., Buffalo Wild Wings Inc. and AFC Enterprises Inc.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.