Business Digest

BUSINESS DIGEST

August 23, 2008

Oil prices fall by more than $6 a barrel

NEW YORK - Oil prices tumbled more than $6 a barrel yesterday - the biggest one-day percentage plunge in nearly four years - after a rebounding dollar and a Russian troop pullback in Georgia sparked another frenzied sell-off.

Crude oil's nose dive wiped out all the gains from the previous day's big rally and reaffirmed the belief that high energy prices are still cutting into consumer demand for fossil fuels in the U.S. and overseas.

Light sweet crude for October delivery fell $6.59, or 5.43 percent, to settle at $114.59 a barrel on the New York Mercantile Exchange. It was crude's largest single-day price drop percentage-wise since Dec. 27, 2004, when prices dropped 6.47 percent. In dollar terms, it was oil's steepest one-day slide since Jan. 17, 1991, just after the start of the first Gulf War. Crude prices had risen for three straight days, including an almost $6 rally Thursday.

At the pump, a gallon of regular fell another penny overnight to a new national average of $3.692, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices had peaked at $4.114 a gallon July 17, but have come down as high energy costs force Americans to cut back on their driving.

Nation

Media

Tribune ratings cut to deep 'junk' status

NEW YORK - Fitch Ratings cut the issuer default rating on Tribune Co. debt further into "junk" status yesterday and said it might lower the media company's rating again because of accelerating declines in newspaper advertising revenue.

Fitch sliced Tribune's rating two notches to "CCC" from "B-." It gave the debt a "negative" outlook, which means a decrease in the company's ratings is likely, usually at some point in the next eight to 12 months.

The ratings agency said a "CCC" rating means "default is a real possibility, and the capacity to meet financial commitments is vulnerable to deterioration in business and economic conditions." Ratings reflect a company's likely ability to repay debt. Lenders use them to set loan terms.

Tribune, whose papers include The Sun, as well as the Chicago Tribune and the Los Angeles Times, owes about $13.4 billion, the bulk incurred when real estate mogul Sam Zell led an $8.2 billion buyout last year, taking the company private, Fitch said.

The Associated Press and Bloomberg News contributed to this article.

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