Asian stocks rallied after China's official PMI (purchasing manager's index) data showed the country's manufacturing sector continued to expand in July, defying forecasts of a contraction. But the picture was mixed, with a private gauge of factory activity by HSBC showing an 11-month low of 47.7 in July. Japan's Nikkei rallied to a one-month peak on the news, the Shanghai Composite hit a one-week high and South Korea's Kospi touched a seven-week high.
"Official PMI is more skewed to larger companies, and the HSBC figure reflects the smaller companies and that is where you get this divergence," said Frederic Neumann, co-head of Asian economics research at HSBC.
(Read more: Will China PMI mark the end of negative data surprises?)
In Europe, the European Central Bank kept its main interest rate unchanged at a record low of 0.5 percent, and reiterated that rates would remain at present or lower levels for an extended period of time.
"Labor market conditions remain weak. Looking ahead to the remainder of the year and 2014, euro area growth should benefit from a gradual recovery in global demand," said ECB president Mario Draghi in a press conference following the announcement. "Our monetary policy stance remains accommodative for as long as necessary. We have unanimously confirmed the forward guidance we gave last time."
Euro zone manufacturing activity grew for the first time in two years in July, with the purchasing manager's index (PMI) climbing to 50.3 in July. A reading above 50 indicates an expansion.
And the Bank of England left its interest rates unchanged at 0.5 percent, as expected, under its new governor, Mark Carney.
The second-quarter earnings parade continued with Dow component Procter & Gamble topping Wall Street expectations.
However, fellow Dow component Exxon Mobil traded lower after the oil giant posted a profit that badly missed forecasts as oil and gas output dropped and earnings for its refining business fell. Meanwhile, rival ConocoPhillips rose after the company posted better-thane-expected earnings and lifted its full-year production forecast.
Royal Dutch Shell slumped after the oil company reported a sharp drop in earnings as it suffered from attacks on its operations in Nigeria.
AIG, Kraft Foods and LinkedIn are among notable companies scheduled to post results after the closing bell.
So far, three-quarters of the S&P 500 companies have reported results, with 67 percent of firms topping earnings expectations and 55 percent beating revenue estimates, according to the latest data from Thomson Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 4.2 percent from last year's second quarter.
General Motors and Ford climbed after the U.S. automaker posted July sales that soared, lifted by gains in full-size pickup trucks. And Toyota jumped after the Japanese car maker reported July sales that gained 16.5 percent. The company is also due to post second-quarter earnings results on Friday.
Dell rallied ahead of its shareholder vote on Friday on an offer from CEO and founder Michael Dell to buy the company. Meanwhile, activist investor Carl Icahn filed a lawsuit in new attempt to stop the buyout.