U.S. stocks closed higher on Wednesday as investors eyed better-than-expected data and remained optimistic on resolution between Greece and its creditors. ( Tweet This )
"Investors should have higher conviction we are back to trend (on economic growth)," said David Lefkowitz, Senior Equity Strategist at UBS. "I think it's mostly about Greece (and) a lot of volatility around what's happening in Europe."
Stocks advanced despite Prime Minister Alexis Tsipras' statements the country will go ahead with the referendum on Sunday and that it is not a determinant of whether or not Greece remains in the euro zone, Reuters reported.
The Dow Jones industrial average closed about 140 points higher, off a more than 170-point rise in the open. The Nasdaq Composite also briefly jumped 1 percent as Apple advanced and biotechs gained.
Dow futures leaped more than 160 points on morning news that Tsipras accepted lenders' conditions in a two-page letter originally sent to the heads of the European Commission that requested only minor revisions to their suggestions on pensions and tax reforms.
"The reason futures (were) strong this morning is the idea we might have a resolution on Greece that keeps it in the euro zone," said James Meyer, chief investment officer at Tower Bridge Advisors. "ADP confirms what we saw all along and I think tomorrow's jobs report is strong."
Financials led advancers in the S&P 500, gaining more than 1 percent as yields climbed.
It's "obviously enthusiasm that a deal will be struck (in Greece). I think probably more important (is) that we had some really good economic data today," said Peter Cardillo, chief market economist at Rockwell Global Capital. "Despite a rise in yields and the dollar is stronger, the first trading day of the second half is probably going to indicate the market is going to do well in the second half."
The U.S. dollar advanced nearly 1 percent against major world currencies, with the euro at $1.105. The yen was weaker against the dollar at 123 yen.
"In terms of the euro I think the euro is going to be pretty much sidelined. It doesn't look like anything significant is going to happen between now and the referendum," said Jason Leinwand, managing director of Riverside Risk Advisors. "I think we're going to go back at least until the fifth to a sort of fundamental focus (that) the U.S. economy is outperforming."
"I think the markets are going to discount everything that happened on Monday," he said. "The market understands it's going to be fairly significant turmoil if (Greece leaves the euro zone)."
Stocks closed mildly higher on Tuesday, with the S&P 500 eking out its narrowest gain on record for the first half of the year. The major indices plunged nearly 2 percent or more on Monday for their worst day of the year as news of a July 5 referendum in Greece negatively surprised investors.
European equities closed mostly higher on renewed hopes of a Greece deal, with the DAX up more than 2 percent. The Athens stock exchange remained closed for the third day in a row.
Greece became the first advanced nation to default on the International Monetary Fund when it failed to make a 1.5 billion euro ($1.7 billion) loan that was due to the IMF Tuesday night.
The European Central Bank kept its emergency liquidity cap for Greek banks unchanged.
The Eurogroup of regional finance ministers concluded a conference call Wednesday on Greece's latest proposal. No other meeting is expected before Sunday's referendum.
"Good economic data is being taken as good news for markets," said Kate Warne, investment strategist a Edward Jones. "I think investors are still concerned the Greece vote could be a 'no.' That continues to weigh on markets."
Asian equities outside of mainland China gained amid news of Greek default, but the Shanghai Composite plunged more than 5 percent.
Investors also kept an eye on Puerto Rico, which has indicated difficulty repaying its debt of $72 billion. On Wednesday, the island's electric power authority, or PREPA, reached a deal with its creditors to make its $416 million payment.