AP - Hurricane Dolly churned into a Category 2 storm as its eye neared the Texas-Mexico border Wednesday, bringing fierce winds and heavy rains that blew down signs, damaged an apartment complex and knocked out electricity to thousands.

AP - Democratic presidential candidate Barack Obama defended his proposal to negotiate with Iran Wednesday and said he would use "big sticks and big carrots" to persuade the country's leaders not to develop nuclear weapons.

AP - President Bush dropped his opposition Wednesday to a broad housing package aimed at bolstering the sagging economy, despite his objections to including $3.9 billion for neighborhoods hit hardest by foreclosures.

AP - Secretary of State Condoleezza Rice pushed North Korea on Wednesday to accept terms to verify the dismantling of its nuclear weapons program, as the two countries held cabinet-level talks for the first time in four years.

AP - Republican John McCain on Wednesday credited the recent $10-a-barrel drop in the price of oil to President Bush's lifting of a presidential ban on offshore drilling, an action he has been advocating in his presidential campaign.

AP - Radovan Karadzic's secret life included a mistress, a bogus family he claimed he left behind in the U.S., and frequent visits to a Belgrade pub called "The Madhouse," acquaintances said Wednesday.

AP - Stocks were mostly higher Wednesday as another decline in oil prices and several upbeat profit reports eased some of Wall Street's concerns about the economy.