Updated from 8:59 a.m. EDT(At 4 p.m. EDT)
Other names in the space traded lower Tuesday in sympathy. Speedway Motorsports ( TRK) slid 7.3% and Dover Motorsports ( DVD) was down 2.9%. Casino operators were also among the worst performers of Tuesday session following a report by the Nevada Gaming Control board that said casino revenue fell 18.1% in February, the 14th straight month of declines. MGM Mirage ( MGM) tumbled 19.5%, Las Vegas Sands ( LVS) dropped 18.8% and Wynn Resorts ( WYNN) finished down by 14.4%. On the other hand, health care providers were among the best performers yet again. After a 6.8% gain on Monday, UnitedHealth Group ( UNH) added another 6.9% on Tuesday. Humana ( HUM), Aetna ( AET) and Coventry Health Care ( CVH) added 2.8% or more on the day.
Coincidentally or not, EMI and Apple Corps' announcement came on the same day Apple made price changes effective in the iTunes store. Instead of pricing every digital MP3 at 99 cents, Apple has introduced a three-tiered model where labels can charge 69 cents, 99 cents or $1.29 depending on the song. For a band that was ahead of its time, it's hard to believe the Beatles are so far behind the curve on digital distribution. If they really wanted to fleece fans that have already bought all their CDs before, wouldn't they be better served putting it on iTunes at the highest-priced tier? (At 7:45 a.m. EDT)
According to Thomson Reuters, the first-quarter earnings growth rate should fall to negative 36.6% from the previous estimate of negative 12.5% from the first day of 2009. Whether its down 12.5% or worse, a negative growth rate will mark the first time the S&P 500 has recorded seven straight quarters of negative growth since Thomson Reuters began tracking the data in 1998. However, if you're looking for a bright spot, changes to mark-to-market accounting rules could be a boon for financial companies. Although the rule changes don't take effect until the second quarter, banks are permitted to implement the accounting changes for the first quarter. Robert Willens, a former managing director at Lehman Brothers who runs his own tax and accounting advisory firm in New York, told TheStreet.com last week that capital levels could improve by more than 20% at banks and that earnings could actually grow somewhere between 7% to 8%. It may not be the complete fix banks need, but every little bit helps.
A reinstitution of some form of the uptick rule could be a major catalyst during tomorrow's session as the Securities and Exchange Commission, but market observers were already jumping on comments from Commission Chair Mary Schapiro. "We are going to put forward about four different proposals, and one of them does include the original," Schapiro said Monday in an address to a conference organized by the Council of Institutional Investors. In addition to the original uptick rule, Schapiro said other proposals include a bid test and a circuit breaker. The uptick rule, instituted by the SEC in 1938 following the Great Depression, said that the short selling of stocks could be done only after the share price "ticked" higher above the prior sale. The SEC made the controversial decision to eliminate the uptick rule in June 2007 after its analysis showed it did little to prevent the manipulation of shares prices given the proliferation of electronic trading.