US close: Dow Jones erases YTD gains, Nasdaq registers worst single-session decline in seven years

Wall Street recorded some heavy losses on Wednesday, as lacklustre third-quarter earnings failed to lift sentiment in the face of rising interest rates and growing indications of a global economic slowdown.

At the close, the Dow Jones Industrial Average was down 2.41% to 25,538.42, while the S&P 500 was 3.08% weaker at 2,656.15 and the Nasdaq had lost 4.43% to 7,108.40.

At its lowest point in the session, the Dow Jones had erased its entire year-to-date gains, while the Nasdaq registered its worst single-session decline since August 2011 and ended in correction territory for the first time in two years. The S&P 500 was also in negative territory.

A sharp selloff ahead of the closing bell caused the Dow, which recorded its third triple-digit loss in succession, and the S&P 500's yearly gains to wiped entirely off the map.

Elsewhere, the yield on the benchmark 10-year US Treasury note was down by 6 basis points at 3.10%.

On the corporate front, Northrop Grumman closed 6% lower despite posting a huge jump in third-quarter profit and lifting its earnings guidance for 2018.

Burger King parent Restaurant Brands lost 1.36% throughout the session despite posting a 49% increase in quarterly profit, while AT&T dropped 8.08% after the release of its third-quarter numbers.

Boston Scientific lost 0.97% despite its quarterly profits beating expectations.

Elsewhere, UPS was down 3.46% after the parcel delivery company's third-quarter earnings per share came in in-line with market expectations and above the previous year's.

Boeing shares closed 1.31% higher after the company raised its full-year guidance.

As of 2120 BST, Microsoft, Tesla and AMD earnings were still on the way.

On the data front, activity in America's manufacturing and services sectors picked-up noticeably in October, supporting the case for further policy tightening by the US central bank, economists said.

IHS Markit's composite output index for the US factory and services sector rose from a reading from a 53.9 last month to 54.8 in October, notching up a three-month high in the process.

Growth was quickest on the manufacturing side of the economy, where the corresponding Purchasing Managers' Index jumped from 55.6 to 55.9, its best level in five months.

IHS Markit's chief business economist Chris Williamson said: "The resilience of the domestic economy in the face of trade worries, and the strong price pressures indicated by the survey data, will add to expectations that the Fed will hike rates again before the end of the year."

Elsewhere, sales of new homes plunged 5.5% in the States during September, the fourth straight monthly drop.

The Commerce Department revealed that newly built homes sold at a seasonally adjusted annual rate of 553,000 last month. New-home sales were downwardly revised for August, wiping out its previously reported gain.

The annual rate of home sales has dropped 15.3% since May.