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Job-hunting in Maryland: The pace of job losses fell sharply in June WinMcNamee/Getty Images

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Muscular Mickey D

Recession or no, consumers still hunger for premium price products—if they're cheap enough. Thanks to its new McCafé coffees, McDonald's (MCD) reported on Aug. 10 that its U.S. same-store sales climbed 2.6% in July. The chain's espresso-based drinks cost 60% to 80% more than its regular brew, but 20% to 25% less than Starbucks (SBUX) drinks. Global growth at McDonald's was even better, up 4.3%, with Europe up 7.2%. So why, given its recent run of mouthwatering sales numbers, has Mickey D stock soured from $64 to $56 this year, one of the worst performers in the Dow? Largely because it was seen as a defensive stock—it actually rose in 2008—and lately the big money has been flowing toward cyclicals and financials.

—Edited by Harry Maurer & Cristina Linblad

Hunting Black Gold

China's shopping binge may be hitting a high point. On Aug. 11, The Wall Street Journal reported that China National Petroleum and China National Offshore Oil have offered $17 billion to buy a majority stake in Argentine oil and gas producer Repsol YPF (REP) from its Spanish parent, Repsol, which owns 84% of the company. If the deal goes through, it would mark China's biggest overseas buy ever, though Repsol YPF denies having gotten a formal offer. Elsewhere in the oil patch, the Journal said on Aug. 12 that federal investigators are examining whether several U.S. companies bought crude that had been stolen from Petróleos Mexicanos and smuggled across the border.

—Edited by Harry Maurer & Cristina Linblad

Maguire Defaults

The tremors shaking Southern California this week came from Maguire Properties, which scooped up large parcels in Los Angeles in 2005-07 to become the largest downtown owner of Class A commercial real estate. The real estate investment trust, which lost $380 million in its second quarter, said on Aug. 11 that it will default on seven of its buildings, telling lenders "that it will no longer continue to fund the cash shortfall associated with the respective mortgages." Most of the buildings are in Orange County, where founder Robert Maguire expanded the company from its L.A. roots. The company insists it has no plans to file for bankruptcy.

See "Maguire Defaults on Seven California Properties"

—Edited by Harry Maurer & Cristina Linblad

Hanging Up on Nortel

Once a dazzling Canadian jewel, communications equipment maker Nortel Networks is fading to a glimmer. Since filing for bankruptcy in January, Nortel has been unloading key units, and on Aug. 10, CEO Mike Zafirovski decided it was time to leave the premises. Zafirovski, who took the job in 2005, was supposed to rebuild Nortel after a crushing accounting scandal, but internal challenges combined with the downturn doomed the effort. Nortel is looking for a new officer who'll deal with creditors and regulators in the bankruptcy process as Nortel sells its corporate networking business and once-dominant optical and landline gear for carriers.

—Edited by Harry Maurer & Cristina Linblad

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