On the economic front, homebuilder sentiment index remained unchanged in September after four straight months of gains, according to the National Association of Home Builders. Still, most homebuilders rallied, led by Beazer and Meritage Homes.
Consumer prices ticked up 0.1 percent in August as the cost of energy fell, according to the Labor Department.
Among techs, Microsoft gained after the tech giant boosted its dividend by 22 percent to 28 cents a share and set a new $40 billion buyback.
(Read more: Cramer: Microsoft's dividend is a desperate move)
The percentage of stocks paying dividends in the S&P 500 is at its highest level in the past 15 years at 83 percent, according to the most recent data from FactSet. The payout ratio, at 31.8 percent, is the highest since mid-2010.
Facebook surged nearly 6 percent to close above $45.
Intel rose after Credit Suisse raised its target price on the tech company to $30 from $28.
Pandora slumped after the Internet radio company proposed a follow-on offering of 10 million share for capital expenditures.
Aeropostale rallied after private equity firm Sycamore Partners disclosed that it had taken an 8-percent stake in the teen clothing retailer, according to a regulatory filing. Rivals Abercrombie & Fitch and American Eagle Outfitters also traded higher.
Outerwall plunged after the operator of video game and movie kiosks, formerly known as Coinstar, cut its current-quarter and full-year earnings and revenue estimates.
Among earnings, Adobe Systems is expected to post earnings after the closing bell.