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Wall Street closes at a higher level as investors ignore the US shutdown and jobs data

Wall Street's major stock indexes rose Wednesday with support from the Healthcare sector, despite a weaker than expected private payroll data and the uncertainty surrounding the first day of U.S. Federal Government shutdown.

Investors were closely watching the ADP National Employment Report, as the Labor Department is expected to postpone its September jobs report if the federal government does not reopen by Friday.

ADP reported a decrease in private payrolls by 32,000, and a downwardly-revised 3,000 drop in August. These numbers were lower than the economists' forecasts of growth of 50,000 for September, and the previous report of 54,000 in August.

The Institute for Supply Management reported that U.S. manufacturing eked out a recovery in September.

All three major U.S. indices rose after opening lower. S&P 500 Healthcare, which was boosted by pharmaceutical firms, was the largest gainer among the 11 major S&P 500 industry sectors.

Tuesday, after Pfizer announced that it had reached a deal with President Donald Trump of the United States, healthcare rallies began in earnest. In exchange for tariff relief, the drugmaker agreed that it would lower its prescription drug prices under Medicaid compared to what they charge in other developed nations. Trump said that he expects more drug companies will follow suit.

Lara Castleton of Janus Henderson Investors said that yesterday was a catalyst for the healthcare sector. She added that the sector had underperformed the market this year.

She said that people haven't avoided it but haven't put as much money into healthcare as in technology or all the AI hype.

Preliminary data shows that the S&P 500 rose 22.46 points or 0.34% to 6,710.92, and the Nasdaq Composite increased 94.02 or 0.42% to 22,754.03. The Dow Jones Industrial Average increased 42.04 points or 0.09% to 46,439.93.

The S&P 500 technology sector gave the benchmark index another boost. Materials was the sector that saw the largest percentage drop during the session.

Castleton observed that investors in equity appeared to be ignoring the uncertainty surrounding the shutdown. The markets have always been resilient when the government is closed. According to a Deutsche Bank note, the S&P 500 has risen during each of six shutdowns in recent years. The indexes advanced during the last government shutdown between the end 2018 and the start of 2019.

AES shares rose sharply after Financial Times reported BlackRock's Global Infrastructure Partners is close to a deal worth $38 billion to buy the utility group.

The U.S. Department of Energy took a 5% share in Lithium Americas, and another 5% in its joint venture with General Motors. Albemarle shares also soared after the U.S. Department of Energy acquired a stake.

Corteva announced it would separate seed and pesticide business into separate publicly listed companies, sending shares of its company sharply down.

(source: Reuters)