U.S. stocks rose after data on retail sales and jobs bolstered confidence in the strength of the economy, while investors watched for progress in Greece's debt negotiations.

"It's a contest right now between the improving economy and fears about Greece," said Brad McMillan, chief investment officer of Waltham, Massachusetts-based Commonwealth Financial Network, which oversees $97 billion. "The economy really is improving and the first quarter was not the end of the world, but Greece is the big thing people are watching in the short-term."

The International Monetary Fund said its team negotiating with Greece left Brussels after failing to make progress on a debt deal. Meanwhile, European Union President Donald Tusk told Greece Prime Minister Alexis Tsipras to stop maneuvering and decide whether to accept the conditions on financial aid. The S&P 500 jumped 1.2 percent on Wednesday, the most in a month, amid optimism that progress was being made in the talks.

Greece's Tsipras has promised Germany and France that he will step up efforts to find a package of reforms and budget fixes before the country's bailout agreement expires at the end of the month.

Data earlier showed sales at retailers picked up in May, a sign households are finally willing to put the gains from continued job growth and lower fuel prices to work. Sales increases were broad-based, with auto dealers, clothing and building material stores among the best performers. A separate report showed applications for unemployment benefits remained below 300,000 for a 14th straight week, a sign of labor market strength.

The S&P 500 had tumbled 2.4 percent from its May record to a two-month low amid concern the Federal Reserve will raise benchmark rates as early as September. The equity gauge this year has traded in its tightest weekly range since the mid-'90s, signaling investor uncertainty as to whether the economic recovery is strong enough to withstand a rate increase.

"For the markets to do better we need good news about the economy," said Krishna Memani, the New York-based chief investment officer at Oppenheimer Funds Inc. "If the retail sales data was weak, we would have had a problem, but it isn't. While the data isn't knocking the cover off the ball, it's reasonable and a solid recovery."