As of 5 p.m. Detroit time Greece is now one full day in arrears, also known as default.  Earlier today, it looked very much like the crisis was ending when the Greek PM sent word to the EU that his government was now willing to accept their conditions.  Germany, which just yesterday said they were still open for negotiations, upon receiving this news quickly rejected the offer and declared there would be no further talks until after Sunday's referendum.  In reaction to that, the Greek PM instantly reversed course on his previous stance to recommend a "Yes" vote to accepting the EU on Sunday to a defiant "No" vote as it is clear now, at least to their government, that Germany is hoping the leftist party will lose on Sunday and be voted out.  It is equally clear that the other EU partners want Greece to stay and, regardless of Sunday's outcome, a Monday meeting has been scheduled to try to make that happen at long last.  Both sides are playing chicken and it is my feeling that both will end up paying a price considerably beyond what would have happened if they had just been negotiating in good faith last week.  In any event, Wall Street doesn't seem too worried about it as the Dow rocketed up 138 points today, not only on new optimism about Europe but also on a slew of positive U.S. reports including the biggest jobs gains since December and the biggest construction spending in over six years.  Volume was about average at 6.4 billion.

Markets | Wed Jul 1, 2015 5:53pm EDT

Wall St. ends higher but energy stocks fall and Greece hopes waver

BY SINEAD CAREW

DJ:     17,757.91  +138.40     NAS:      5,013.12  +26.26       S&P:      2,077.42  +14.31

(Reuters)  U.S. stocks closed higher on Wednesday but were down from earlier highs as energy stocks declined and Greece's debt crisis showed no clear signs of resolution.

The benchmark S&P 500's energy sector was dragged down by the biggest slide in oil prices since April after traders were surprised by a report that showed U.S. crude stockpiles rose for the first time in more than two months. [O/R]

Euro zone central bank chiefs kept in place their cap on a funding lifeline to Greece, maintaining pressure as Greece's lenders run out of cash. The country's banks have been shut since Monday ahead of a Sunday referendum on the bailout package offered by its international lenders last week.

Finance Minister Yanis Varoufakis said Athens aims to secure a deal Monday and would be willing to accept "strict" conditions in a new bailout package, if the sustainability of Greece's debt is guaranteed.

Investor hopes for a Greek debt deal, which earlier had helped drive a rally, ebbed during the day, according to Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio.

"Until it's all said and done they're just jockeying for position back and forth. The negotiation process still isn't over," Matousek said.

Many investors were also holding off ahead of Thursday's scheduled release of the closely watched U.S. non-farm payroll report for June while the three-day weekend celebrating the U.S. July Fourth holiday kept others away, said Brian Fenske, head of sales trading at ITG in New York.

While the market was primarily driven by Greece's woes, stronger-than-expected jobs and construction data gave stocks some support as did Swiss insurance giant ACE Ltd's (ACE.N) $28 billion offer for upmarket property insurer Chubb Corp (CB.N).

Chubb's shares ended up 26 percent to $119.99, making it the second biggest boost for theS&P 500. Rival Travelers Cos Inc (TRV.N) rose 2.7 percent, the biggest driver for the Dow.

U.S. private employers added 237,000 jobs in June, the biggest gain since December, while construction spending rose in May to its highest level in just over 6-1/2 years, reports showed.

The Dow Jones industrial average .DJI rose 138.4 points, or 0.79 percent, to 17,757.91, the S&P 500 .SPX gained 14.31 points, or 0.69 percent, to 2,077.42, and the Nasdaq Composite .IXIC added 26.26 points, or 0.53 percent, to 5,013.12.

The S&P energy sector .SPNY fell 1.3 percent, the only S&P sector in the red on Wednesday. U.S. crude oil futures CLc1 settled down 4.2 percent at $56.96 a barrel. Brent LCOc1 settled off 2.5 percent at $62.01.

Airline stocks tumbled after the U.S. Department of Justice said it was investigating whether some carriers were colluding to keep ticket prices high.

Advancing issues outnumbered declining ones on the NYSE by 1,914 to 1,179, for a 1.62-to-1 ratio on the upside; on the Nasdaq, 1,475 issues rose and 1,288 fell for a 1.15-to-1 ratio favoring advancers.

The benchmark S&P 500 index posted 14 new 52-week highs and 22 new lows; the Nasdaq Composite recorded 76 new highs and 89 new lows.

About 6.4 billion shares changed hands on U.S. exchanges, below the 7.4 billion average for the last five sessions, according to data from BATS Global Markets.