European shares ended up, though far from session highs, on bets the first negative inflation in the euro zone since 2009 would trigger a long-awaited move from the European Central Bank to basically begin to print money.
"The deflationary data suggested the ECB will be justified in doing more and that is probably what people are betting on right now," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
Further support for stocks came after data showed US private employers added 241,000 jobs last month, more than the 226,000 expected, while the November number was revised to 227,000 from the previously reported 208,000.
"You can also attribute (higher equity prices) to prospects of continued growth in the US," said Mr Jacobsen.
Non-farm payrolls estimates for December are at 240,000 according to a Reuters survey. The jobs report is due before Friday's opening bell.
As of 1646 GMT (10:16 p.m. in India) the Dow Jones industrial average rose 123.52 points, or 0.71 per cent, to 17,495.16, the S&P 500 gained 15.57 points, or 0.78 per cent, to 2,018.18, and the Nasdaq Composite added 39.38 points, or 0.86 per cent, to 4,632.11.
Minutes from the most recent meeting of the Federal Reserve policy-setting committee are due at 1900 GMT (12:30 a.m. in India) and traders will scan them for clues on the timing of an interest rate hike. The Fed said it would take a "patient" approach in deciding when to lift borrowing costs.
The S&P 500 had fallen for a fifth straight session on Tuesday, for its longest losing streak in 13 months, as oil prices tumbled further and data showed slower growth in the US services sector in December.
Brent crude futures fell as much as 2.8 per cent on Wednesday and were last down 0.6 per cent on the day. US crude, down 2.3 per cent at its session low, was recently up 1 per cent at $48.40 per barrel.
J.C. Penney shares surged 18 per cent to $7.74 after the department store operator said same-store sales rose 3.7 per cent in November and December.
Micron Technology fell 1.6 per cent to $32.36 after the memory chipmaker's quarterly revenue forecast on Tuesday missed Wall Street's expectations.
Monsanto reported a 34 per cent drop in quarterly profit, but the decline was less steep than analysts expected and shares gained 1.5 per cent to $117.50.
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