On the economic front, the Institute for Supply Management reported that U.S. manufacturing unexpectedly contracted to 49.5 in November, dropping to the lowest level in nearly three years. The weaker-than-expected data added investors' concerns about the U.S. economy.
Meanwhile, construction spending climbed 1.4 percent to an annual rate of 872.1 billion dollars in October, according to the U.S. Commerce Department, as spending on homes became stronger. Analysts had expected a 0.5 percent increase.
However, data from overseas showed good sign of economic growth. The HSBC China manufacturing data rose to 50.5 in November from 49. 5 in October, the first time since October 2011.
On corporate news, the computer manufacturer Dell surged after Goldman Sachs upgraded its stocks to "buy" from "sell."
Ford gained as the U.S. automaker announced that its November auto sales gained 6.5 percent, beating expectations.
On other markets, the dollar lost ground against the euro as upbeat news from the Europe lifted the shared currency. Oil gained slightly to close below 90 dollars a barrel, while the gold edged up 5.10 dollars to settle at 1,716 dollars an ounce.