Citigroup gained after the financial giant announced it will cut 11,000 jobs as part of restructuring actions in an aim to further lower expenses and improve efficiency. Additionally, the bank said its fourth quarter pre-tax charges will total approximately $1 billion and projected annual expense savings will exceed $1.1 billion starting in 2014. Rivals Bank of American and Morgan Stanley were also sharply higher.
Freeport-McMoRan plunged after the company announced it was buying Plains Exploration & Production andMcMoRan Exploration in two separate deals for approximately $9 billion.
On the economic front, factory orders unexpectedly gained in October, according to the Commerce Department. And the U.S service sector expanded more than expected in November, with the ISM non-manufacturing index gaining to 54.7. A reading above 50 indicates expansion in the sector.
And productivity increased at its fastest rate in two years, according to the Labor Department.
Meanwhile, the private sector created 118,000 jobs in November, according to the latest ADP jobs report, but was still short of expectations for a gain of 125,000. The report comes ahead of Friday's closely-watched government non-farm payrolls report. Economists surveyed by Reuters forecast a gain of 93,000.
Also helping with gains, a speech from China's new leader Xi Jinping fueled optimism that the country would continue to boost global growth. (Read More: China's New Leader Gives Market a Fillip, but Will It Last?)
Facebook climbed after Nasdaq OMX announced late Tuesday evening that the social-networking giant will be added to the Nasdaq-100 index, replacing Infosys. Infosys will be moving its listing to the NYSE from the Nasdaq.
Best Buy said it is changing the payment date of its regular quarterly dividend to December from early January.
Among earnings, Men's Wearhouse is scheduled to post results after the closing bell.
Weekly mortgage applications gained last week as loan requests for new purchases hit a new high for the year, according to the Mortgage Bankers Association.