According to the report, Delta officials have received proposals from J.P. Morgan Chase & Co., Citigroup Inc. and General Electric's commercial finance arm.

If Delta does not obtain the financing, the filing could be delayed, according to the sources, who spoke on the condition that they not be identified because the plan has not been finalized.

If Delta files for court protection, it would become the third major airline to operate under bankruptcy. United Airlines parent UAL Corp., which filed in 2002, said it expects to emerge in late January. And Arlington-based U.S. Airways Group Inc., which filed its second bankruptcy in September, expects to return at the end of this month.

Northwest Airlines Corp. has also signaled that if it is unable to obtain more than $1.1 billion in annual pay and benefit cuts from its workers, it may have to consider filing for bankruptcy protection.

Northwest executives had resumed talks last week with the Aircraft Mechanics Fraternal Association, the union that represents Northwest's mechanics and aircraft cleaners. That group has been on strike since Aug. 20.

Like many airlines, Delta has been hurt by high fuel prices and weak revenue. It has lost nearly $10 billion since 2001.

Last week, Delta announced plans to sell 11 Boeing 767-200 jets for $190 million. It also announced plans to reduce flights out of its Cincinnati hub by 26%. Also this week, the airline finalized the sale of its Atlantic Southeast Airlines Inc. division to SkyWest Inc., a Utah-based regional carrier, for $350 million in cash.

At the end of June, Delta had about $1.7 billion in cash, down from $2 billion in March.

The United States imports a little over 10 million barrels of oil a day and more than 3 million barrels of gasoline.

As for Branson, the high-profile chief of Britain's Virgin Group told CNBC viewers in an interview Tuesday that he was interested in building an oil refinery in an attempt to cut airline fuel prices.

Branson's comments come a week after his Virgin Atlantic Airways raised fuel surcharges for the second time in four months to make up for rising oil prices.

"We are actively looking at building a refinery," he said.

"If we don't start now to get more refineries built, then fuel prices could literally rocket to $100 to $200 (per barrel of oil) and the world economy would come to a grinding halt."

Branson did not give any specifics regarding the project, which has been the subject of speculation in Europe for some time.

"We are reasonably far down the line," said Branson, whose wide-ranging Virgin empire includes an airline, as well as mobile phone, music and financial services.

"We most likely won't do it ourselves. We're talking about a $2 billion investment - we're willing to put the money in and we're trying to encourage other airlines to put money in as well. It's a great way of hedging against fuel prices."

After Hurricane Katrina damaged America's Gulf Coast oil operations, Branson said it was vital to address the inadequate capacity to refine oil globally - and he believes something must be done soon.

Using lackluster earnings from Best Buy Co. as a barometer, investors pulled back Tuesday over fears that consumers are keeping their pocketbooks closed as the make-or-break holiday shopping season approaches.

According to the Associated Press, Best Buy's profits - which rose 25% from a year ago - did not meet Wall Street's forecasts, and the company said the current quarter would also miss targets, heightening investors' concerns that high gasoline and heating oil prices will hurt consumers.

A drop in crude oil didn't help the stock market, either.

A barrel of light crude closed at $63.11, down 23 cents, on the New York Mercantile Exchange.

The retail news also overshadowed a slightly better-than-expected report on wholesale inflation. The Labor Department's Producer's Price Index (PPI) rose 0.6% in August - less than the 0.7% expected. With costly fuel prices removed, "core" PPI was flat for the month.

"You have some good economic data, but I think everyone is still trying to figure out what the post-Hurricane Katrina environment is like," said Joseph Battipaglia, chief investment officer at Ryan Beck & Co.

"For now, the fundamentals look strong, but that could change in the next few months as the distortions caused by Katrina come through in the economic data - and that's what has people holding off."

The Dow Jones Industrial Average fell 85.50, or 0.8%, to 10,597.44.

Broader stock indicators also lost ground. The Standard & Poor's 500 index dropped 9.36, or 0.75%, to 1,231.20, and the Nasdaq Composite Index slid 11.08, or 0.51%, to 2,171.75.

But even as investors focused on oil and consumer spending, the latest economic data remained surprisingly robust.

Along with the lower PPI data, the Commerce Department reported that the nation's trade deficit fell to $57.9 billion in July from $59.5 billion in June - despite higher import prices for crude oil.

Yet the results from Best Buy, the nation's largest electronics retailer and a Wall Street favorite, cast a pall on the markets. Best Buy tumbled $5.57, or 11%, to $44.79, while rival Circuit City Stores Inc. lost 46 cents, falling to $16.46. RadioShack Corp. slid 53 cents to $25.68.

"It's hard to blame everything on just one company, but Best Buy's earnings - and some disappointing commentary from the company - really got people questioning the impact of oil on consumer spending," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.

"And with a lot of economic data and the Federal Reserve meeting next week, you're going to find people hesitant to make any big moves."

The Federal Reserve's Open Market Committee meets Sept. 20, and despite hopes that the Fed would pause in its steady stream of interest rate hikes, decent economic data in the wake of Katrina has led Wall Street to expect another quarter-percentage-point rate hike.