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US stocks down as investors digest earnings

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Gold tumbles again after sharpest fall in over 5 years

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Netflix ( NFLX ) shares drop after disappointing outlook

(Updates to afternoon)

By Caroline Valetkevitch

NEW YORK, Oct 22 (Reuters) - Gold prices declined again

on Wednesday, a day after spot gold had its sharpest single-day

drop in over five years, while most major stock indexes fell

with Netflix ( NFLX ) shares down after the company's outlook

disappointed.

Gold, one of the year's best-performing trades, slid as

investors booked profits. It remains on course for its strongest

year since the 1979 oil crisis and is up more than 50% so far

this year. Spot gold fell 1.49% to $4,062.39 an ounce.

Shares of Netflix ( NFLX ) were down about 10%, and Wall Street's three

major indexes were sharply lower in afternoon trading. Investors

are getting ready for results after the close from Tesla

, which will kick off earnings season for the so-called

Magnificent Seven group of megacap stocks. Tesla shares were

down about 2.5%.

Investors also digested developments on the trade front.

Reuters

reported

, citing a U.S. official and three people briefed by U.S.

authorities, that the Trump administration is considering a plan

to curb a dizzying array of software-powered exports to China,

from laptops to jet engines, to retaliate against Beijing's

latest round of rare earth export restrictions.

"It looks like we're letting a little air out of the

balloon," said Oliver Pursche, senior vice president, at

Wealthspire Advisors in Westport, Connecticut.

"Given the sharp rally and gains that we've made year to

date, and in particular since the beginning of April, combined

with the concerns over future economic growth and the absence of

data due to the government shutdown, there's no reason to make

material moves in either direction," he said, but maybe "you're

going to take some profits; you're going to do some

rebalancing."

The Dow Jones Industrial Average fell 392.08 points,

or 0.84%, to 46,529.77, the S&P 500 fell 67.23 points, or

1.01%, to 6,667.43 and the Nasdaq Composite fell 385.72

points, or 1.69%, to 22,567.94.

MSCI's gauge of stocks across the globe fell

7.29 points, or 0.73%, to 987.56.

The pan-European STOXX 600 index fell 0.18%.

However,

London stocks rose for a third consecutive day as investors

increased bets on interest rate cuts from the Bank of England

after data showed inflation unexpectedly held steady. The

blue-chip FTSE 100 gained 0.9%.

U.S. Treasury yields dipped, though the market was range-bound

as the U.S. government shutdown went into its 22nd day with no

resolution in sight. The yield on benchmark U.S. 10-year notes

fell 1 basis points to 3.953%, from 3.963% late on

Tuesday.

The Federal Reserve meets next week, and investors have

almost fully priced in a 25-basis-point rate cut.

The dearth of U.S. economic data due to the ongoing shutdown

means that policymakers could be left flying blind at the

meeting, a less-than-ideal situation as they remain divided over

which risks deserve the most attention.

The yen rose against the dollar. Sources told Reuters that new

Prime Minister Sanae Takaichi is preparing an economic stimulus

package likely to exceed last year's 13.9 trillion yen ($92.19

billion) to help households tackle inflation.

The Bank of Japan also meets next week, where expectations

are for the central bank - like the ECB in Europe - to stand pat

on rates.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

fell 0.14% to 98.84, with the euro up 0.15% at

$1.1615. Against the Japanese yen, the dollar weakened

0.18% to 151.66.

Oil prices were higher. U.S. crude rose 2.25% to $58.53 a

barrel and Brent rose to $62.58 per barrel, up 2.05% on

the day.