Engine code P0740 came up on my Jeep and I did a complete tranny flush and checked solenoids in the pan and it still comes up. Tranny slips from 2nd to 3rd gear upshifting. Any help would be appreciated thanks.

its a torque converter lock up clutch code. if your fluid was purple, or metallic colored. i would first off replace the converter and fully flush the heck out of the transmission and change the filter. a drain and fill is not enough to get the junk out, you need a flush and filter. hopefully the transmission is not already gone.
it sounds funny to me that it is slipping on the 2-3 shift with that code. does it slip in third, does the converter lock up on the hwy? was the car acting funny or engine light on for a long period of time before you addressed this issue? if so,you may have already done to much damage. you might be looking at a rebuild or remanufactured transmission.

The fluid was still pinkish in color when drained. When accelerating through 2nd gear the tranny starts to slip around 2000 rpm's. It revs up to about 2500 then kicks into 3rd. However if I shift through the gears myself it does not slip.

I know that there is a different shift strategy for the transmission from drive mode to manual mode. on older ones, if the vacuum line was disconnected the transmission would shift hard(bang) into gear in drive mode but shift smooth in manual mode. on your transmission, it might even use different apply components to achieve a given ratio.
Oh,leaking valve bodies can cause symptoms like that,( ya, id look into that one first.)
Im not a transmission tech, so dont take anything to hart that comes out of my mouth.