Stocks Trim Losses as Drug Makers Rally

Economic Indicators - US MBA mortgage applications fell by 12.7% in the week ended September 26, with the purchase mortgage sub-index down by 1.0% and the refinancing sub-index down by 20.6% [1] - The average 30-year fixed-rate mortgage increased by 12 basis points to 6.46% from 6.34% in the prior week [1] - The US September ISM manufacturing index rose by 0.4 to a 7-month high of 49.1, exceeding expectations of 49.0 [6] - The September ISM price paid sub-index fell by 1.8 to an 8-month low of 61.9, below expectations of 62.7 [6] - The September ADP employment change unexpectedly declined by 32,000, marking the largest decline in 2.5 years, while August was revised lower to a loss of 3,000 from a previously reported gain of 54,000 [5] Market Performance - Stock indexes showed mixed results, with the S&P 500 Index down by 0.08%, the Dow Jones Industrials Index up by 0.06%, and the Nasdaq 100 Index down by 0.02% [5] - The broader market faced pressure due to the US government shutdown, leading to a decline in the dollar index and a rise in gold prices to a record high [4] - Rising corporate earnings expectations are seen as a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations [8] Sector Movements - Pharmaceutical stocks rallied, driven by hopes that Pfizer's deal with the US government will pave the way for other pharmaceutical makers, with Moderna up by over 8% and AstraZeneca up by over 7% [19] - Weakness in medical device makers negatively impacted the overall market, with Insulet down more than 6% and Dexcom down more than 5% [15] - Chip makers and AI-infrastructure stocks saw gains, with Micron Technology up more than 5% and ARM Holdings up more than 4% [20] Company-Specific News - Corteva announced plans to split its seed and pesticide businesses into separate companies, leading to a decline of over 5% in its stock [16] - Nike reported Q1 revenue of $11.72 billion, surpassing the consensus estimate of $11.02 billion, resulting in a stock increase of over 5% [22] - AES Corp saw a significant increase of over 16% following news of BlackRock's Global Infrastructure Partners LP being in advanced talks to acquire the company [17]