The Shanghai Composite halted its two-day sell-off, but still ended in bear market territory, having lost 20 percent from a ten-month high hit in February.
The Chinese central bank said it expected seasonal factors that caused a recent spike in interbank market rates to gradually fade. Local lenders in China have faced a severe liquidity strain in recent weeks, with interbank lending rates hitting double digits last week, raising concern that efforts to rein in credit growth and steer the economy away from a dependence on credit-driven investment could go wrong.
"Some pundits attribute rally to better data," said Art Cashin, director of floor operations at UBS Financial Services. "While the numbers were good, this bounce is 90 percent China sigh of relief.That allows "dip" bargain hunters to keep pecking away."
Apple hovered around the $400 mark after Oppenheimer cut its price target on the tech giant to $460 from $480. In a note, analyst Ittai Kidron cited checks that show "steady demand for the iPhone 4/4S and mixed demand for the iPhone 5."
Pandora surged after the music-streaming company said its online radio service has been incorporated into the dash of more than 100 different vehicle models and estimates that one-third of all new cars sold in the U.S. this year will have Pandora installed.
Among earnings, Lennar rallied after the homebuilder posted earnings that beat expectations. Other homebuilders including Beazer,Pulte and DRHorton also rose following the news.
Barnes & Noble tumbled after the bookstore chain reported that its quarterly net loss more than doubled as sales of its Nook device and e-books continued to plunge and business at its bookstores declined.
Walgreen slumped to lead the S&P 500 laggards after the drugstore chain reported weaker-than-expected quarterly results, citing slow front-end sales and a challenging economy.
Carnival rose after the cruise line company announced plans to split the roles of chairman and chief executive, with Arnold Donald taking the role of CEO effective July 3. Micky Arison will continue to serve as chairman of the board of the company. Separately, the company posted earnings that topped expectations, but revenue and outlook were shy of projections.
Apollo Group and Smith & Wesson are among notable companies slated to post earnings after the closing bell.
(Read More: Earnings Season Already Looks Like a Train Wreck)
First Solar soared to lead the S&P 500 gainers after the solar company was upgraded to "hold" from "sell" by Maxim Group and initiated with an "overweight" rating by JPMorgan.
Microsoft and Oracle announced a tie-in to garner advantage against newer, web-based cloud computing companies.
The government auctioned $35 billion in two-year notes at a high yield of 0.430 percent, the highest since May 2011. The bid-to-cover ratio, an indicator of demand, was 3.05.