BUSINESS

• Freddie loses big in quarter
Freddie Mac, the mortgage financing giant, posted a second-quarter loss 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 mortgages. Shares fell 19 percent.

• Out on a high note
When Ray Milchovich became chief executive of Foster Wheeler seven years ago, it was an even bet whether the industrial construction giant would close its doors.

• Covance inks Eli Lilly deal
Covance said yesterday it will buy Eli Lilly's 450-acre research campus in Indiana for $50 million and assume a key role in drug development for the struggling pharmaceutical company.

• Gelato company says hello to success
Ciao Bella Gelato started a quarter-century ago by making all-natural gelato and sorbet inside a tiny storefront kitchen in New York's Little Italy.

• Biz Buzz: Study warns of junk mail's secret danger
Here's another reason to hate junk mail: It has a bigger carbon footprint than 11 coal-fired power plants, seven U.S. states or the emissions generated by heating nearly 13 million homes for the winter.

• Little Ferry manufacturing plant at center of generic-drug recall
Actavis Totowa, the U.S. headquarters of the Icelandic generic drugmaker, is contacting hospitals and pharmacies across the country to recall all the generic medicines made at its Little Ferry manufacturing plant.

• Time Warner profit plunges on AOL
NEW YORK -- Time Warner's second-quarter earnings fell 26 percent on declining subscriber fees at its AOL online unit and lower ad revenue at the Time publishing business, the media conglomerate said yesterday.

• Wall Street rallies on falling oil, Cisco
Wall Street logged another winning day yesterday as a drop in oil prices and a better-than-expected profit report from technology bellwether Cisco Systems helped corral the market's worries about the financial sector.

• IRS offers to settle tax-shelter disputes
The Internal Revenue Service, capitalizing on recent court victories, offered 45 companies, including banks, the chance to settle disputes over the use of a leasing tax shelter.

• Garden State Briefs
The Securities and Exchange Commission sued Prudential Financial yesterday, alleging a former subsidiary of the financial services company improperly reported $200 million in income through sham reinsurance contracts.

• National Business Briefs
Oil prices briefly dropped below $118 a barrel yesterday -- $30 below their record high -- after a jump in U.S. crude and other fuel supplies fed beliefs that high energy prices are eating into demand.