US stocks
On Wednesday, the Dow Jones Industrial Average fell 99.99 points, or 0.33%, to 30,423.81, the S&P 500 lost 24.82 points, or 0.67%, to 3,695.16 and the Nasdaq Composite dropped 91.89 points, or 0.85%, to 10,680.51. Image Credit: Gulf News archive

New York: US stocks snapped a two-day streak of gains on Wednesday as weakness in shares of Abbott Laboratories and a rise in Treasury yields sapped momentum from the current earnings season and outweighed a surge in Netflix Inc shares.

The yield on the 10-year U.S. Treasury note touched its highest level in more than 14 years as soft housing data did little to alter expectations the Federal Reserve will remain aggressive in hiking interest rates as it attempts to wrestle down stubbornly high inflation.

The rise in yields weighed on rate-sensitive names like real estate stocks, down 2.56% as the worst-performing S&P sector on the day, and megacap growth names such as Microsoft Corp and Amazon.com Inc. Energy was the sole S&P sector to end the session in positive territory with a gain of 2.94%.

Abbott Laboratories tumbled 6.5% after reporting lower-than-expected growth in international medical device sales, hit by a strong dollar and supply challenges in China.

Netflix shares, however, jumped 13.1% as the best perfomer operformerP 500 after it attracted 2.4 million new subscribers worldwide in the third quarter, more than double the consensus forecast, and guided for 4.5 million additions by year-end.

"The bonds are just weighing so heavily on it ... it's a shame to see good earnings be wasted," said JJ Kinahan, CEO of IG North America in Chicago.

"Ultimately earnings drives stocks but when they are being overshadowed it is tough to have that optimism, but ultimately good earnings will lead to stocks going higher, it is a matter of how much the macroeconomic picture is going to continue to hurt those earnings." The Dow Jones Industrial Average fell 99.99 points, or 0.33%, to 30,423.81, the S&P 500 lost 24.82 points, or 0.67%, to 3,695.16 and the Nasdaq Composite dropped 91.89 points, or 0.85%, to 10,680.51.

Fed officials have largely been in sync in their public comments about the need to be aggressive in raising rates to tackle inflation. On Wednesday, Federal Reserve Bank of Minneapolis President Neel Kashkari said job market demand remains strong and underlying inflation pressures probably have not peaked yet.

The Fed's "Beige Book" survey of economic activity showed firms noted price pressures remained elevated, although there was some easing in several districts, while the labor market showed some signs of cooling.

The U.S. central bank is widely expected to raise rates by 75 basis points for the fourth straight time at its November meeting.

The Fed's effect on the housing market continues to grow.

Housing starts, a measure of new residential construction, dropped 8.1% in September in the latest sign of the economy losing steam.

The PHLX Housing Index stumbled -4.50%, marking another sector unlikely to help stocks reverse months of declines, with the three main U.S. indexes still mired in bear markets.

Dow components Procter & Gamble Co gained 0.93% and Travelers Companies Inc rose 4.44% after the companies posted better-than expected quarterly profit.

Third-quarter profit growth expectations for S&P 500 companies have edged up to 3% from 2.8% on Tuesday, according to Refinitiv data, still well below the 11.1% increase forecast at the start of July.

Tesla Inc advanced 0.84% ahead of its earnings after the bell, with focus on any weakness in demand that is starting to weigh on the auto industry. Shares dropped 3.94% following the close as the electric vehicle maker missed revenue estimates for the third quarter.

Volume on U.S. exchanges was 11.05 billion shares, compared with the 11.62 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 3.28-to-1 ratio; on Nasdaq, a 2.69-to-1 ratio favored decliners.

The S&P 500 posted 2 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 42 new highs and 232 new lows.