Reese & Jake Share a Steak

Originally posted Tuesday March 04, 2008 12:10 PM EST

Reese Witherspoon and Jake Gyllenhaal enjoyed a romantic evening out with friends at New York City restaurant Prune Sunday night, onlookers tell PEOPLE.

Witherspoon, 31, and Gyllenhaal, 27, who was introducing his girlfriend to the restaurant where he's a regular, "looked really happy," says a source.

Dining with a group of six, the couple, who shared the restaurant's dry-aged ribeye steak for two, "were really cute,” adds the source. "They were really sweet together and they looked really in love."

Spotted in SoHo earlier in the day, Gyllenhaal toted a bag out of A.P.C. with the Penelope star following closely behind.

As for their whole dinner party, an onlooker says, "They were all laughing and sharing items from the menu ... They were a lively group."