Business Briefs

Cisco's report helps spur rally in stocks

NEW YORK — Wall Street logged another winning day Wednesday on a drop in oil prices and a better-than-expected report from technology bellwether Cisco Systems.

Oil extended its slide into a third day, settling down 59 cents at $118.58 a barrel.

Cisco rose more than 5 percent after the networking equipment company posted earnings late Tuesday that narrowly topped Wall Street's forecast.

The Dow Jones industrial average rose 40.30, or 0.35 percent, to 11,656.07. Broader indicators also rose. The S&P 500 index gained 4.31, or 0.34 percent, to 1,289.19. The Nasdaq composite index rose 28.54, or 1.21 percent, to 2,378.37.

Freddie Mac posts staggering loss

NEW YORK — Freddie Mac posted a second-quarter loss Wednesday that was more than three times larger than Wall Street expected as a huge number of borrowers with good credit fell behind on their exotic and risky home loans.

The mortgage financier, officially known as the Federal Home Loan Mortgage Corp., lost $821 million for the quarter, compared to a $729 million profit in the same period last year.

Revenue fell 28 percent to $1.69 billion. The losses were concentrated in a handful of states, notably California, Florida, Nevada and Arizona, where speculation was rampant during the real estate boom.

CarMax hits brakes because of sales drop

RICHMOND, Va. — Used vehicle dealer CarMax said Wednesday it is trimming staff and will temporarily slow its store growth after seeing a drop in car and truck sales because of high gas prices.

CarMax said sales dropped beginning Memorial Day and continued falling though July, resulting in an average drop of 17 percent for the two months.

CarMax, which has more than 16,000 workers and opened its first Charleston dealership in May, said it has worked to lower staffing levels mainly through scheduling and attrition.

It also is re-evaluating all open jobs.

AOL unit drags on Time Warner earnings

NEW YORK — Time Warner's second-quarter earnings fell 26 percent to $792 million on declining subscriber fees at its AOL online unit and lower ad revenue at the Time publishing business, the media conglomerate said Wednesday. Revenue rose 5 percent to $11.6 billion.

The company affirmed its full-year financial targets after revenue rose at its film, cable and networks segments. It also took legal and tax steps that will make it possible to split its AOL online business and sell it in parts.

Pentagon seeks new aerial refueler bids

WASHINGTON — The Pentagon opened a second round of bidding Wednesday for a $35 billion Air Force tanker contract following an error-plagued first attempt that featured bitter competition between Northrop Grumman and Boeing Co.

A revised draft request was issued for proposals to build 179 aerial refueling tankers meant to replace the Air Force's aging fleet.

Northrop and Airbus parent European Aeronautic Defence and Space Co. won the original contract, but Boeing protested.

A review found "significant errors" in the Air Force's decision.