Greek Finance Minister Yanis Varoufakis met with euro zone finance ministers on Wednesday after his new leftist-led government won a parliamentary confidence vote for its refusal to extend an international bailout.
The meeting included discussion of what could constitute a "bridge agreement'' for Greece once its bailout expires on Feb. 28, a Greek government official told Reuters.
But the chairman of the meeting, Jeroen Dijsselbloem, had said ahead of the meeting that talks will likely be inconclusive.
Read MoreShowdown: Crucial 48 hours for Greece
"The market is being held hostage to the uncertainty over the Greek crisis," said Marc Chaikin, CEO of Chaikin Analytics.
Other geopolitical developments on Wednesday included peace talks in Belarus by France, Germany, Russia and Ukraine, while fighting intensified in Kiev. President Barack Obama sent the text of his proposal to Congress regarding use of military force against the Islamic State.He limited operations to three years and barred use of U.S. troops in "enduring offensive ground combat." Obama is expected to speak on the issue around 3:30 p.m.
Wednesday's Eurogroup meeting is just part of the continuing negotiations as euro zone and Greek leaders have several scheduled discussions over the next few days.
"You've still got the PIGS (Portugal, Ireland, Greece, Spain)," said Bryan Turley, managing director of investment banking at MLV. "Greece going the wrong way is going to have an impact on all those countries."
Read MoreEurope ends lower as Greece deadline approaches
"I think the perception is always the bigger issue in Greece," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. He pointed out that the Greek economy is about the size of Dallas'.
The U.S. budget deficit widened slightly in January, fueled in part by higher spending on government health care services for low-income Americans, according to the Treasury Department.
With slightly higher interest rates, weekly mortgage applications were down 9 percent on a seasonally adjusted basis, the Mortgage Bankers Association said.
"For the fourth straight week, mortgage applications to buy a home has fallen, this time by 6.5 percent week-over-week as there is still no evidence yet, at least from this economic statistic, that demand for buying a home is on the cusp of accelerating," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.
Apple traded by more than 2 percent higher, boosting the Nasdaq as the top performing major index. The stock closed at $122.02 a share on Tuesday, giving the firm a record market cap of more than $700 billion.