Stocks close higher on Greece hopes, US data

U.S. stocks closed higher on Wednesday as investors eyed better-than-expected data and remained optimistic on resolution between Greece and its creditors.

"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 Dow Jones Industrial Average closed up 138.40 points, or 0.79 percent, at 17,757.91, with Travelers leading most blue chips higher and Caterpillar and Exxon Mobil the greatest decliners. The index remains about 0.40 percent lower year-to-date.

The S&P 500 closed up 14.31 points, or 0.69 percent, at 2,077.42, with financials leading nine sectors higher and energy the only decliner.

The Nasdaq closed up 26.26 points, or 0.53 percent, at 5,013.12.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, fell to trade near 16.

About three stocks advanced for every two decliners on the New York Stock Exchange, with an exchange volume of 856 million and a composite volume of nearly 3.7 billion in the close.

Crude oil futures settled down $2.51, or 4.22 percent, at $56.96 a barrel on the New York Mercantile Exchange. Gold futures settled $2.50 lower at $1,169.30 an ounce.