Restaurant Winners and Losers: Darden

Restaurant stocks mainly fell Thursday after a Raymond James analyst downgraded his rating on a number of sit-down restaurant stocks, saying they are now fairly valued.

Analyst Bryan C. Elliott said in a note to investors that a surge in the stock prices in the sector lately is mainly due to short-sellers rather than investors making long-term investment decisions.

Short-sellers bet against a stock. The practice, which is legal and widely used on Wall Street, involves borrowing a company's shares, selling them, and then buying them when the stock falls and returning them to the lender. The short-seller pockets the difference in price.

The short-selling has bumped up stock prices so that the stocks now appear to be fairly valued, Elliott said....