Wednesday was a momentous day on Wall Street, with the Federal Open Market Committee deciding to lower interest rates in a split decision. The central bank settled on a quarter-point cut, but two officials voted to keep rates steady, and another wanted a larger half-point reduction instead. That kept markets volatile, but some stocks ended the session with big losses. McDermott International (NYSE:MDR), Roku (NASDAQ:ROKU), and NeoPhotonics (NYSE:NPTN) were among the worst performers. Here's why they did so poorly.
McDermott provokes fears about its future
Shares of McDermott International plunged 63% after the energy construction and engineering specialist reportedly brought on professional consultants to help it turn around its ailing business. In a statement, McDermott said that hiring external advisors is a routine event and that it's looking to take "positive and proactive measures ... to improve its capital structure and the long-term health of its balance sheet." Yet with so much pressure in the energy markets right now, investors are worried that McDermott might lack the financial flexibility to get things turned around quickly.
Roku faces new competition
Streaming specialist Roku saw its stock drop nearly 14% following news that a rival is making its video-streaming player free to customers. Comcast (NASDAQ:CMCS.A) is looking at making its Xfinity Flex streaming TV device free to customers who use its broadband internet service. By doing so, Comcast clearly hopes that viewers will simply use its own services rather than turning to Roku as an alternative video services provider. The price reduction amounts to just $5 less per customer per month for Comcast, but it could have a big impact on how many people choose Xfinity Flex over Roku, and that's what Roku shareholders seem to fear the most.
NeoPhotonics gets a downgrade
Finally, shares of NeoPhotonics finished lower by 11%. The optical electronics specialist got negative comments from analysts at B. Riley, who downgraded NeoPhotonics stock from buy to neutral. The company has had to deal with fallout from trade tensions between the U.S. and China, especially in connection with bans on business with Chinese industry giant Huawei. Just about the only good news for shareholders is that B. Riley set a price target of $6.50 on NeoPhotonics shares, and today's drop actually makes the stock a little cheaper than that for would-be bargain-hunting investors.