Restaurant shares mainly rise after Fed cuts rate

NEW YORK - Restaurant shares mainly rose after the Federal Reserve cut a key interest rate by a half-point point in a bid to steer the economy clear of a prolonged recession and spur economic growth.

The Fed cut its federal funds rate, or the rate banks charge each other to borrow money, to 1 percent from 1.5 percent.

Investors had largely expected the Fed to chop the rate by a half point or three-quarters of a point.

The last cut was on Oct. 8 when the Fed lowered the rate by a half-point — a coordinated move with foreign central banks — in an attempt to loosen the credit markets and spur lending.

Shares of Darden Restaurants Inc., which operates the Olive Garden and Red Lobster chains, rose 36 cents to $20.06 while shares of McDonald's Corp. rose $1.70 to $58.32.

Starbucks Corp. shares rose 54 cents, or 5 percent, to $11.40, while DineEquity Inc. shares fell 78 cents, or 4.3 percent, to $17.52. DineEquity owns the IHOP and Applebee's brands.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.