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Taco Bell Closes Nine Restaurants

Taco Bell closed nine restaurants in New York and New Jersey after a suspected outbreak of E. coli bacteria may have sickened more than 50 people in three states.

But the division of Yum! Brands Inc. said no new cases had been reported since Nov. 29 and it had planned to reopen the eight New York locations late Tuesday. Yum! operates more than 20,000 restaurants in the U.S..

The New Jersey Department of Health and Senior Services said it was investigating 40 cases of E. coli infection in four counties. So far, 23 people who were sickened between Nov. 20 and possibly Nov. 30 ate at a Taco Bell restaurant, the department said in a statement on its Web site. The source of the outbreak had not been determined.

Claire Pospisil, a spokeswoman for the New York State Department of Health, said 14 people in Long Island had been infected with E. coli in the last two weeks. The source of those infections has not yet been identified, but health officials were looking at Taco Bell restaurants, she said.

Ms. Pospisil said the department was investigating additional reports from other New York counties and the number of infected people in the state was expected to increase by Wednesday.

The Pennsylvania Department of Health also that it was investigating four cases of E. coli. Three of the cases involved an individual eating at a Taco Bell restaurant in Montgomery County, but no source had been identified.

The E. coli investigation comes just after Yum! announced plans to expand its Taco Bell chain internationally. Brand testing in India, the Middle East, Mexico and the Philippines will begin next year.

Shares of Yum, which announced at a previously scheduled investor meeting Tuesday it would double its quarterly cash dividend, initially traded down on the E. coli news, but closed up nearly 3% to $63.26 on the New York Stock Exchange.

SHARE HIT 'TEMPORARY PHENOMENON'

Analysts were monitoring the E. coli scare, which made the front page of the New York Times and received a lot of media play Tuesday. Yet they noted that such scares tend to have only a short-term effect on the stock of the company involved.

"It's more of a temporary phenomenon unless it's widespread," said Arun Daniel, senior retail and consumer analyst for ING Investment Management. "So far (the problem) appears to be somewhat contained to a certain number of Taco Bells in New York and New Jersey."

Escherichia coli is a usually harmless bacteria normally resident in the guts of animals, including humans. A new and pathogenic strain called E. coli O157:H7 was identified in 1982 and now causes an estimated 73,000 cases of infection and 60 deaths in the United States each year.

Most illness is associated with undercooked, contaminated ground beef. People generally become ill from the strain two to eight days after being exposed to the bacteria and infection often causes severe bloody diarrhea and abdominal cramps, according to the Centers for Disease Control and Prevention.

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