Why Arcos Dorados Stock Got Socked Today

The surprise victory of leftist Luiz Inácio Lula da Silva in Brazil's runoff presidential election was affecting the country's stocks on Monday... and not in a positive way. Fears of loose fiscal discipline and a challenging business climate led to a sharp decline in the country's currency, the real, against the dollar, and to a sell-off in many Brazilian equities.

Arcos Dorados (NYSE:ARCO), the world's largest franchisee of McDonald's (NYSE:MCD) restaurants, is based in Uruguay, not Brazil, though the latter is its most significant single market by far. Given that, it's little wonder that its stock was caught in the broader sell-off. This was compounded by a major U.S. bank's recommendation downgrade. At Monday's close, Arcos Dorados stock was down by nearly 13%.

Image source: Getty Images.

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