(Updates with final closing prices, volume data)

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Indexes up: Dow 0.09%, S&P 500 0.34%, Nasdaq 0.42%

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Healthcare index extends rally after Tuesday's

Pfizer ( PFE )/Trump deal

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AES ( AES ) rallies sharply to boost utilities sector

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September ADP jobs report softer than expected

By Sinéad Carew and Niket Nishant

Oct 1 (Reuters) -

Wall Street's main stock indexes closed higher on Wednesday,

with the biggest boost from the healthcare sector, as investors

looked past weaker-than-expected private payrolls data and

uncertainty around the first day of the U.S. federal government

shutdown.

With the Labor Department's September jobs report expected to be

postponed if the government has not reopened by Friday,

investors were paying close attention to the ADP National

Employment Report.

ADP showed a decline in private payrolls of 32,000 and a

downwardly revised 3,000 decline in August. These numbers were

weaker than economist forecasts for growth of 50,000 in

September and the prior report of a 54,000 advance in August.

Elsewhere in economic data, the Institute for Supply Management

showed U.S. manufacturing edged toward recovery in September.

After opening lower, all three main U.S. indexes advanced. Among

the S&P 500's 11 major industry sectors, the biggest gainer was

S&P 500 healthcare, boosted by pharmaceutical

companies.

The healthcare rally started in earnest on Tuesday after Pfizer ( PFE )

and U.S. President Donald Trump said they had cut a

deal. The drugmaker agreed to lower prescription drug prices in

the Medicaid program - compared to its charges in other

developed countries - in exchange for tariff relief. Trump said

he expected more drug companies to follow suit.

"Yesterday was the catalyst for healthcare," said Lara

Castleton, U.S. head of portfolio construction and strategy at

Janus Henderson Investors, adding that the sector was probably

ripe for a rally after underperforming the rest of the market so

far this year.

"People have not necessarily been avoiding it, but they have

not been as heavily allocated into healthcare as they have been

in technology and all the AI hype," she said.

The Dow Jones Industrial Average rose 43.21 points,

or 0.09%, to 46,441.10, the S&P 500 gained 22.74 points,

or 0.34%, to 6,711.20 and the Nasdaq Composite

gained 95.15 points, or 0.42%, to 22,755.16.

The S&P 500 tech sector provided the second

biggest boost for the benchmark index, with Micron

rallying 8.9% and the broader Philadelphia chip index

adding 2%.

The sector with the biggest percentage decline during the

session was materials, which ended the day down more

than 1%.

The healthcare sector's biggest gainers were Biogen

, up 10.9% and Thermo Fisher, up 9.4%.

Castleton noted that equity investors appeared to be

shrugging off uncertainties around the shutdown. Markets have

historically been resilient during government closures. The S&P

500 rose during each of the last six shutdowns, according to a

note from Deutsche Bank. During the last government closure

between the end of 2018 and the beginning of 2019, indexes were

able to advance.

In individual stocks, a 16.8% rally in shares of AES ( AES )

made it the biggest gainer in the benchmark index and a strong

boost for the S&P 500 utilities sector. This was after

the Financial Times reported that BlackRock ( BLK )-owned Global

Infrastructure Partners was nearing a $38-billion deal to

acquire the utility group.

While the materials sector was broadly weaker, Lithium Americas

Corp U.S. shares rallied 23.3% and rival

Albemarle closed up 4.2%. The U.S. Department of Energy

has taken a 5% stake in Lithium Americas ( LAC ) and a separate 5% stake

in the company's joint venture with General Motors ( GM ).

Corteva ( CTVA ) said it would separate its seed and pesticide

businesses into separate publicly traded companies, sending its

shares down 9%.

Advancing issues outnumbered decliners by a 1.92-to-1 ratio

on the NYSE where there were 580 new highs and 99 new lows.

On the Nasdaq, 2,707 stocks rose and 2,003 fell as advancing

issues outnumbered decliners by a 1.35-to-1 ratio.

The S&P 500 posted 37 new 52-week highs and 7 new lows

while the Nasdaq Composite recorded 111 new highs and 68 new

lows.

Volume wise, on U.S. exchanges 19.79 billion shares changed

hands compared with the 20-day moving average of 18.62 billion.