Sector Snap: Restaurants Climb On Profit Reports

NEW YORK (AP) — Better-than-expected profit results for several restaurant chains led to a surge in stock prices Wednesday, even as sales continued to slide due to consumers' desire to save cash.

Shares of many stocks rose by double-digit percentages after three companies reported higher profit than Wall Street expected. The broader markets rebounded as well on upbeat earnings reports from industrial and technology companies.

Before the market opened, McDonald's Corp. — the industry leader in the fast-food category — reported its first-quarter profit rose nearly 4 percent, beating analyst estimates on average, according to a poll by Thomson Reuters. The boost came mainly from strong sales growth in most regions of the world.

McDonald's has been faring well during the economic downturn as consumers look for a cheaper alternative to a sit-down meal.

Sit-down restaurants are still, by and large, reporting declines in both sales and traffic. But cost cutting has helped many report better-than-expected profits.

P.F. Chang's China Bistro Inc. said before the market opened that its profit rose 33 percent in its first quarter, far higher than analysts expected. The company, which operates the P.F. Chang's China Bistro chain and the smaller Pei Wei chain, also increased its guidance for the year.