NEW YORK (AP) -- Hopes that a deal could be reached between Greece and its creditors pushed stocks higher on Wednesday.
The U.S. market opened higher, following strong gains for European stocks, after Greek Prime Minister Alexis Tsipras wrote a letter to the nation's creditors and appeared to make concessions. Greece failed to repay a loan to the International Monetary Fund that was due on Tuesday after talks between the nations and its creditors broke down late last week.
Investors are worried that Greece could leave the euro region if no agreement is reached.
"The developments in Greece ... seem to be driving sentiment more than anything," said Phil Orlando, chief equity strategist at Federated Investors. "What we're seeing now is a little bit of a bounce back based on a sentiment that we're getting close to a resolution."
The Standard & Poor's 500 index rose 14.31 points, or 0.7 percent, to 2,077.42. The Dow Jones industrial average climbed 138.40 points, or 0.8 percent, to 17,757.91. The Nasdaq composite gained 26.26 points, or 0.5 percent, to 5,013.12.
Despite rallying on Wednesday stocks are still lower for the week after the market logged its worst day of the year on Monday. Fears that Greece could leave the euro, prompting chaos in financial markets, set off a global stock market rout.
"Monday's reaction to Greece was largely overdone," said Bob Pavlik, chief market strategist at Boston Private Wealth. "I don't think the ramifications of Greece defaulting would be that dire for the global economy."
Despite the intense interest in Greece's situation, the country accounts for only a small fraction of Europe's economy.
In the U.S., investors got two encouraging reports on the economy.
Payroll processor ADP said businesses added 237,000 jobs last month, up from 203,000 in May and the most since December. A separate survey showed U.S. manufacturing growth improved in June. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to the highest level this year.
The government's monthly nonfarm payrolls report will be published on Thursday.
A strong jobs report would likely increase the conviction among many economists that the Federal Reserve will raise its benchmark interest rate later this year for the first time in more than a decade. The central bank has held its rate close to zero for more than six years to help the economy recover from the Great Recession.
In deal news, Chubb jumped $24.85, or 26 percent, to $119.99 after rival insurer Ace said it was buying the company in a cash-and-stock deal valued at about $28.3 billion. The combined company plans to use the Chubb name and will have its main offices in Zurich, Switzerland, where Ace is based. The news pushed up the prices of other insurance companies.
Corporate deal making has been on the rise this year as CEOs become more confident about the outlook for economy and interest rates remain close to historic lows. The low rates mean that corporations can borrow cheaply to finance acquisitions.
Airline stocks were among the day's losers after the U.S. government confirmed that it is investigating possible collusion between major airlines to limit available seats and keep airfares high. Thanks to a series of mergers starting in 2008, American Airlines, Delta Air Lines, Southwest Airlines and United now control more than 80 percent of the seats in the domestic travel market.
Delta's stock fell 81 cents, or 2 percent, to $40.27. American Airlines dropped $1.14, or 2.8 percent, to $38.80.
Energy stocks also sagged after the price of oil fell sharply following an Energy Department report that crude inventories rose for the first time in eight weeks.
Analysts had forecast supplies would drop by 1.3 million barrels, but instead they increased by 2.4 million barrels, according to the Energy Department's weekly petroleum status report.
Benchmark U.S. crude fell $2.51 to close at $56.96 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.58 to close at $62.01 a barrel in London.
In currency trading, the euro fell to $1.1056 while the dollar rose to 123.17 yen.
Bond prices fell, pushing the yield on the benchmark 10-year Treasury note up to 2.42 percent from 2.35 percent on Tuesday.
In metals trading, gold dropped $2.50 to $1,169.30 an ounce. Silver was little changed at $15.55 an ounce and copper rose 1.2 cents to $2.64 a pound.
In other futures trading on the NYMEX:
--- Wholesale gasoline fell 4.2 cents to close at $2.007 a gallon.
--- Heating oil fell 5.1 cents to close at $1.839 a gallon.
--- Natural gas fell 4.9 cents to close at $2.783 per 1,000 cubic feet.