Why is 2-3 volts on 120 v circuit that is not connected
Disconnected  wires are a radio antenna. They pick up all sorts of junk which high impedance DVMs can see because they are so sensitive.   Mind you, on AC mode your meter doesn't only look for 60Hz, though crosstalk between parallel wires is a common source.  

Plug an incandescent night light into the circuit.  I bet the phantom voltage instantly goes away, and the night light does not light.