Jersey Mike's Subs Inc. (JMKE) stock climbed 8% Thursday, appearing to benefit from pin action as takeover speculation surrounding another major restaurant chain lifted several stocks in the sector.
The gains came despite broader market weakness. The Nasdaq fell 1.35%, while the S&P 500 declined 0.54%. The consumer discretionary sector edged up just 0.1%.
Jersey Mike's rally coincided with a surge in Chipotle Mexican Grill Inc. (CMG), whose stock jumped more than 6% following a Financial Times report that Starbucks Corporation (SBUX) had explored a potential acquisition of the company.
The potential deal would bring together two of the country's most recognizable brands. However, the report could not establish whether discussions remain active or whether Starbucks has submitted a formal offer. Sources cautioned that the proposed transaction may never materialize.
The report appeared to generate pin action, in which news involving one company sparks buying interest in related stocks.
Other restaurant stocks also advanced. McDonald's Corporation (MCD) stock gained 2.52% to $236.69, while Yum! Brands Inc. (YUM) rose 1.75% to $142.81 at the time of publication Thursday.
