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Mad-Cow Case Confirmed in Washington State

Bill Snyder

The Department of Agriculture on Tuesday said it has confirmed at least one case of mad-cow disease in Washington state, but it says no tainted meat has entered the food supply.

The news immediately sparked a selloff in shares of McDonald's(MCD Quote - Cramer on MCD - Stock Picks), the world's largest consumer of beef, and other restaurant chains. In after-hours trading, McDonald's was off as much as 98 cents, or 4%, at $24.30.

Wendy's(WEN Quote - Cramer on WEN - Stock Picks) was down 90 cents, or 2.27% after hours to $38.76.

Also down after hours was Outback Steakhouse(OSI Quote - Cramer on OSI - Stock Picks), which lost 90 cents, or 2%, to $43.73, after gaining 47 cents in regular trading, and Lone Star Steakhouse and Saloon(STAR Quote - Cramer on STAR - Stock Picks), which was off $2.18, or 9.4%, to $21.05, after gaining 68 cents during the day.

Tyson Foods(TSN Quote - Cramer on TSN - Stock Picks), which processes chicken and pork in addition to beef, was up 38 cents in the after-hours market, to $14.36, a gain of 2.72%.

Secretary of Agriculture Ann Veneman said it appears that no beef tainted with the deadly disease worked its way into the food supply of the U.S. "We are confident in the safety of our food supply," she said.

Veneman said at a news conference that the infected cow was either sick or injured and therefore not destined for the food supply.

Mad cow disease, also known as bovine spongiform encephalopathy (BSE), had previously not been found in the U.S., but it decimated the European and British cattle industry in the 1990s and in 2001.

In a press release, McDonald's said that the meat packer in question has no connection to the company's supply chain.

Jim Cramer, a founder of TheStreet.com, cautioned investors not to overreact.

"I've seen McDonald's hit before [on safety concerns], and it comes right back," he said during the "Kudlow & Cramer" show on CNBC. Indeed, an hour after the announcement, McDonald's began climbing from its after-hours lows and was trading at $24.54.