Stocks recovered most of their losses in the previous session to end flat amid hopes that the Federal Reserve will take more action to support the economy following a manufacturing report that showed an unexpected contraction for the first time since July 2009.

"You're in a political year—The [QE] window is shut," said Todd Schoenberger, managing principal at The BlackBay Group. "The Fed would have announced a QE program last meeting when they extended Operation Twist."

Investors will be looking ahead to government's June employment report at the end of the week. Economists expect a gain of 90,000 jobs, according to a Reuters survey.

European stocks finished higher amid expectations that the ECB will cut interest rates to a record low on Thursday.

Apple briefly hit $600 a share for the first time since April. Earlier, a U.S. judge rejected a request by Samsung Electronics to lift a ban on U.S. sales of its Galaxy Tab 10.1, in another blow for the South Korean tech giant.

Microsoft slipped after the world's biggest software maker announced a $6.2 billion charge to write down the value of an online advertising agency it bought five years ago.

Also among techs, Research In Motion dipped after Barclays cut its rating on the BlackBerry maker to "underweight" from "equal weight."