This is just the nature of the way mosting hosting accounts through control panels work.  You have a number of different options.  The first and most likely is that whatever SMTP service you are connecting to from the Host Settings / Advanced Settings / SMTP Server and Port, just needs the xyz.com domain setup for email.  If this is not possible then you need to use an external SMTP service.  Using Google Apps mail is easy, has lots of help and examples.  Make sure you use SMTP Authentication.

Also, are you currently using SMTP Authentication?  If not, enable (x) Basic and use the admin@abc.com and passw.  They still might not allow you to send if the xyz.com is not a local domain to the MTA.

It took me forever to get this information from WebHost4Life.  I had the same experience with GoDaddy and my conclusion is that most of their first and second level staff don't understand smtp, smtp relaying, or setting up an smtp server.  They also don't want to admit to that, and don't listen to what you are saying.  It took me well over 4 months to get WebHost4Life to figure out the proper settings, I gave up on GoDaddy.  This type of problem may not be true of all hosts but so far I have had nothing but trouble when it comes to smtp settings for DotNetNuke.  Past smtp, I really like WebHost4Life and have very few problems with them.  They have been really responsive to any problems and have done a good job. As for smtp settings, this is what I finally came up with.  They have been working for a while now so it seems correct.  SMTP Server:  mail.webhost4life.com, SMTP Authen: Basic, and Enable SSL not Checked.  For my hosting account the first thing I did was setup an email account of no-reply@domain.com.  You should have several free accounts from WebHost4Life that you can configure using your web interface.  You need to have one of those setup and then you can enter the rest of the settings as follows:  SMTP UserName: no-reply@domain.com, SMTP Password is the password you set.  These settings should do the trick. 

As I said, this took a while to figure out and it is still working on my site, so it should work for you, but it may not.  I tried several combinations including mail.mydomain.com, smtp.mydomain.com, smtp.webhost4life.com, and a few others and this was the only one I could get to work.  Hope this helps.