By Anora Mahmudova and Carla Mozee, MarketWatch

NEW YORK (MarketWatch) -- The S&P 500 and the Dow Jones Industrial Average closed at record levels, led by gains in the health-care, tech and consumer discretionary sectors.

Economic data continued to point to an improving economy; a manufacturing index showed the strongest level of new orders since the end of last year.

The S&P 500 (SPX) gained 13.09 points, or 0.7%, to end at 1,973.32, its 23rd record close this year. The benchmark index hit an all-time intraday high at 1,978.62.

The Dow Jones Industrial Average (DJI) came within two points of 17,000 during the session. It gained 129.47 points, or 0.8%, to close at 16,956.04, its 12th record close of 2014.

The Nasdaq Composite (RIXF) rose 50.47 points, or 1.1%, to 4,458.65, its highest level since March 2000.

The Russell 2000 (RUT) closed within a hair's breadth of its previous record level reached on March 4, gaining 12.64 points, or 1%, to end at a preliminary 1,205.82.

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Marc Doss, regional chief investment officer for Wells Fargo Private Bank, said economic data point to a rebound in the U.S. economy.

"After a terrible first quarter, we are seeing a rebound in housing, manufacturing. The economy is growing but slowly enough for the Fed to keep rates low for a while. This environment is very favorable for equities," Doss said.

On Wednesday, investors will get a report on private-sector job creation. The ADP employment report, due at 8:15 a.m. Eastern time, is expected to show an increase of 179,000. It comes a day before the monthly U.S. jobs report, moved up by 24 hours because of the July 4 holiday.

In a further sign that consumers are spending more, U.S. car sales in June reached the highest annual rate in more than eight years and exceeded the pace than economists had expected. General Motors Co. (GM.XX) shares rose 3% as the car maker reported its U.S. car and light truck sales rose 1% in June to 267,461 vehicles.

Shares of Netflix Inc.(NFLX) leapt 7% after Goldman Sachs analysts upgraded the stock to a buy, from neutral.

Exelon Corp.(EXC) was one of the biggest decliners in the S&P, as utilities dragged on the index. The stock dropped 2% Tuesday but has climbed 30% so far this year. Read: Movers and Shakers.

In other markets, Japan's Nikkei Average rose 1.1% and Europe's Stoxx 600 closed higher.

Upbeat Chinese and European economic data briefly lifted oil futures (CLQ4) above $106 a barrel, but prices settled slightly lower for a fourth session in a row ahead of weekly updates on U.S. supplies. Gold futures (GCQ4) logged their highest settlement in about 11 weeks, as clashes in eastern Ukraine and the Middle East boosted safe-haven demand for the precious metal.

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