Earlier, JCPenney announced it is laying off 2,200 employees, according to a report from The Dallas Morning News. The cuts follow another 19,000 employees that have been laid off in the past year as the retailer continues to struggle with dropping sales.
Limited Brands, TJX and Costco all reported better-than-expected sales in February. Meanwhile, several major retailers including Target, Macy's, Nordstrom and Kohl's, stopped reporting monthly sales.
Boeing climbed after the U.S. National Transportation Safety Board said it is examining the lithium-ion battery on the 787 Dreamliner, but has yet to find the cause of the fire in January. Earlier, Boeing touched its highest level since June 2008.
Time Warner rose to its best level in nearly 11 years after the media company said it will spin off its Time Inc. magazine division. The company plans to complete the process by the end of the year. The decision came after a deal to merge most of the magazine group with Meredith fell apart. At least four brokerages raised their price target on Time Warner.
Hot Topic skyrocketed nearly 30 percent after private-equity firm Sycamore Partners announced it will buy the teen apparel retailer for $14 a share in cash.
Green Mountain rallied after the specialty coffee maker said the Lipton hot and iced teas will be available in K-Cup and Vue packs starting this summer.
Among earnings, Smithfield Foods surged after the pork producer posted quarterly results that topped Wall Street expectations, thanks to higher sales of its packaged products. Kroger advanced after the supermarket chain swung to a quarterly profit after total sales matched Wall Street estimates.
H&R Block and Pandora are among notable companies slated to report earnings after the closing bell. (Read More: Pandora's Earnings: What to Expect)
European shares pared their early gains after the European Central Bank kept its interest rates unchanged at a record low of 0.75 percent, as expected. And the Bank of England kept its benchmark interest rate unchanged at 0.5 percent and held the size of its asset purchase program at 375 billion pounds.
"A gradual recovery should commence in the second part (of 2013)," said ECB President Mario Draghi at a news conference following the rate decision. "Inflation expectations for the euro area remain firmly anchored, in line with our aim of maintaining inflation rates below but close to 2 percent over the medium term. Overall, this will allow our monetary policy stance to remain accommodative."
The Nikkei came off a four-and-a-half year high but held onto most of its gains amid after the Bank of Japan opted to leave its monetary policy unchanged. Investors widely expected the move, and are looking ahead to April's meeting for bold stimulus under Haruhiko Kuroda's new leadership.
On the economic front, jobless claims unexpectedly declined to a seasonally adjusted 340,000 last week, according to the Labor Department, versus expectations for a gain to 355,000. And the four-week moving average fell to hit its lowest level since March 2008. But planned layoffs climbed in February as the financial sector cut the most employees in over a year, according to the report from consultants Challenger, Gray & Christmas.
The employment data come one day before the Labor Department reports non-farm payroll figures, with economists expecting a gain of 160,000.
(Read More: Jobs Report Could Add More Fuel to Stock Rally)
Also on the economic front, the U.S. trade deficit expanded to $44.45 billion in January, according to the Commerce Department. And productivity slid at a 1.9 percent annual rate in the fourth quarter, the fastest pace in nearly four years, according to the Labor Department.
And consumer credit rose at an annual rate of 7 percent, or $16.15 billion in January from December, according to the Federal Reserve. Economists polled by Reuters had expected consumer credit to rise $14.50 billion in January.