The stock market climbed on Wednesday, reacting favorably to the Federal Reserve's decision at the end of its two-day meeting to keep interest rates unchanged. After fearing that the central bank might be more hawkish in its future monetary policy, investors were reassured by the Fed's inaction, figuring that it will likely buy them at least three more months of rock-bottom rates. Major market benchmarks climbed by more than 1%, and the rate-sensitive areas like the gold market also posted gains. Yet some stocks gave up ground, and Shutterfly (NASDAQ:SFLY), Skechers USA (NYSE:SKX), and Banc of California (NYSE:BANC) were among the poorest performers on the day.
Shutterfly's picture gets cloudier
Shutterfly fell 12% in the wake of news that Amazon.com (NASDAQ:AMZN) would offer its own photo-printing service to compete against the picture specialist. The new service, dubbed AmazonPrints, will reportedly offer printed photos for as little as $0.09 per picture, and higher-value offerings like photo books, calendars, and greeting cards either are available or will be in the near future. Given that Amazon already offers digital photo storage to users of its Amazon Prime service, the move into photo printing was a natural follow-on for the tech giant. Nevertheless, for photo-printing specialist Shutterfly, the big question is whether Amazon's move will cause an exodus among its customer base.
Skechers gets a downgrade
Skechers USA dropped 9% after analysts at Morgan Stanley downgraded the stock. The analyst company said that it believes Skechers will face a short-term disruption from changing trends in the athletic footwear industry, forcing it to make inventory adjustments that could cause delays in ordering and availability. Moreover, competition from existing shoemakers could take a bigger bite out of Skechers' future growth, spurring the analyst to cut its price target by nearly 40% to $25 per share. That's still above the current price of Skechers stock, but it implies a much slower growth trajectory than many investors were hoping to see.
Banc of California keeps falling after its CFO departs
Finally, Banc of California declined by 8%. The bank announced early Tuesday that it would consolidate its finance office under its chief strategy officer and chief investment officer. Current CFO James McKinney submitted his notice of resignation on Monday, taking effect after a 60-day period, after which he will sign on as CFO at insurance company Kemper. During the interim, CSO Francisco Turner will serve alongside McKinney as co-principal financial officers. Accounting, tax, financial policy, and reporting will remain CFO-level responsibilities, while CIO Brian Kuelbs will be responsible for capital allocation strategy and execution. The level of scrutiny over the bank has increased since Banc of California paid $100 million for the rights to have its name on a soccer stadium in Los Angeles. Given the mixed performance of companies who've paid up for stadium naming rights in the past, investors might well be right to be concerned about the future direction for the bank's stock.