On the employment front, private employers added 176,000 jobs in June, according to the ADP National Employment Report, beating expectations for a gain of 105,000 positions.
In addition, weekly jobless claims dropped 14,000 to a seasonally adjusted 374,000, according to the Labor Department, marking the biggest decline since April. The four-week moving average for new claims fell 1,500 to 385,750.
Both reports come ahead of the key government non-farm payroll report on Friday. Economists surveyed by Reuters expect to see a gain of 90,000 in June following an increase of 69,000 in the month prior.
Also on the economic front, the U.S. service expanded less than expectedin June to 52.1 from 53.7 in May, its lowest level since January 2012, according to the ISM's services index.
“Although we expect some short-term choppiness, we remain bullish,” said Joe Bell, senior equity analyst at Schaeffer’s Investment Research. “The negative sentiment is near their lowest levels since March 2009 and that kind of sentiment backdrop is going to be a catalyst for the rest of the year.”
Apple gained above $600 a share amid reports the tech giant will unveil a smaller iPad tablet by year-end. (Read More: iPad Mini Should Drive Apple to $1001—Analyst)
Netflix surged almost 15 percent after CEO Reed Hastings disclosed that the company's streaming service surpassed 1 billion hours in June for the first time.
Ratings agency Moody's changed its outlook on Barclays to "negative" from "stable," citing the uncertain management outlook after recent departures in the light of the Libor scandal.
Many retailers posted weaker-than-expected same-store sales in June, as consumers pulled back on spending amid concerns about jobs and the economy. Macy's , Costco and The Buckle were among some of the companies that disappointed.
Auto parts supplier Visteon said it would offer some $800 million to take full control of South Korean car air conditioner maker Halla Climate Control, but analysts cautioned that a key shareholder may hold out for more.
Buyout fund CarlyleGroup said it had acquired 49 percent of China's MandarinHotel Holdings for an undisclosed sum, giving it control of the company.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
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FRIDAY: Non-farm payrolls
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