memory problem in C

test.c

#include <unistd.h>
#include <stdio.h>
#include <time.h>
#include <stdlib.h>
#include <string.h>

char *foo2 ()
{
	return "FOO";
}

char *foo1 ()
{
	char *str = strdup(foo2());
	str[2] = 'X';
	return str;
}

int main (int argc, char *argv[])
{
	char *str;
	while (1) {
		str = foo1();
		puts(str);
		free(str);
	}
	return 0;
}