The problem is not FixedPointList - the problem is that Mathematica by default doesn't display that many digits. Consider for example
FixedPoint[newton3, 1.0] // InputForm
which displays several more decimals. Another option is to increase PrintPrecision:
SetOptions[InputNotebook[], PrintPrecision -> 10]
This increases the number of decimals shown for all values in the current notebook.
Style[FixedPoint[newton3, 1.0], PrintPrecision -> 10]
does the same for the particular expression.
Finally we may do the following to make sure the problem isn't with FixedPoint:
FixedPoint[newton3, 1.0] == Sqrt[3]
(* True *)