NEW YORK (CNN/Money) - The major indexes managed to close out the session Wednesday with fresh multi-month highs -- despite last-minute profit taking -- thanks to buying in technology and optimism about the economy.

Whether investors can build on those gains Thursday may depend on the slew of economic news that is due.

"I like the rally today and the volume is good, but we still have a lot of economic reports to get through the rest of the week that could either undermine it or strengthen it," said Timothy Ghriskey, president of Ghriskey Capital Partners.

Before the open of trade Thursday, reports on weekly jobless claims and a revised reading on productivity are due.

The number of Americans filing new claims for unemployment is forecast to have fallen modestly, to 390,000 last week from 394,000 the previous week, according to a consensus of economists surveyed by Reuters. Second-quarter productivity is forecast to have risen to 6.2 percent, compared with an initial reading of a 5.7 percent gain.

Shortly after trading begins, July factory orders are expected. They are forecast to show an increase of 0.9 percent, after rising 1.5 percent in June. The Institute for Supply Management's index on the services sector of the economy is forecast to slip to 63.0 in August from 65.1 in July.

There are no major corporate earnings reports expected, although Intel's (INTC: down $0.52 to $28.22, Research, Estimates) mid-quarter update due after the closing bell will certainly attract attention.

On Wednesday, the Nasdaq composite (up 11.42 to 1852.90, Charts) added 0.6 percent, the Dow Jones industrial average (up 45.19 to 9568.46, Charts) closed with a gain of about 0.5 percent, while the Standard & Poor's 500 (up 4.28 to 1026.27, Charts) index closed up around 0.4 percent. The Dow and S&P had only been modestly higher earlier, but the Nasdaq had traded up as much as 1.1 percent before the rally fizzled a bit.

Nonetheless, the gains were sufficient to push the indexes to new highs for the year, for the second session in a row. The Nasdaq hit a new 17-month high, closing at its highest level since April 1, 2002, when it finished the session at 1,862.62.

Both the Dow and S&P 500 ended the session at new almost 15-month highs, seeing their best closes since June 18, 2002. On that day, the Dow closed at 9,706.12 and the S&P closed at 1,037.11.

Wednesday's economic news was fairly encouraging. In addition, positive comments on product demand from Cisco's CEO and a slew of bullish calls on the technology sector added to the good cheer, distracting investors from ho-hum August sales numbers from the automakers and news that four of the largest U.S. mutual fund firms have been accused of illegal trading practices by New York Attorney General Eliot Spitzer.

Cisco Systems (CSCO: up $0.65 to $20.24, Research, Estimates) was the Nasdaq's most active issue, gaining 3.4 percent in response to comments by the networking leader's CEO at a tech conference. John Chambers said orders in August were better than expected. But he cautioned that investors shouldn't read too much into that, as it represented a trend that was not necessarily sustainable beyond the month.

Credit Suisse First Boston raised its rating on the infrastructure software and enterprise software sectors to "overweight" from "market weight."

CSFB also upgraded business software maker Siebel Systems (SEBL: up $0.50 to $11.01, Research, Estimates) to "outperform" from "neutral." Another business software maker, Oracle (ORCL: up $0.37 to $13.76, Research, Estimates), was upgraded to "outperform" from "market perform" by Wachovia Securities. Siebel soared almost 4.8 percent and Oracle showed a gain of about 2.8 percent.

Morgan Stanley raised its rating on software maker SAP (SAP: up $2.96 to $34.06, Research, Estimates) to "overweight" from "equal-weight." Shares rose 9.5 percent.

Microsoft (MSFT: up $1.04 to $28.30, Research, Estimates) added 3.8 percent. The stock is a member of the Dow 30, as well as the Nasdaq's most-heavily weighted issue. Earlier in the day, the company released a new group of keyboards and mice for PC use.

Chips and chip gear makers were the main laggards on the Nasdaq, with investors pulling money out of those sectors to feed networking and software.

But tech wasn't the only thing on analysts and investors' minds. J.P. Morgan upgraded Dow stock General Electric (GE: up $0.68 to $31.12, Research, Estimates) to "neutral" from "underweight," following news Tuesday that GE's NBC unit was chosen for a deal to get Vivendi's U.S. entertainment assets. GE's stock advanced 2.2 percent.

August vehicles sales from the auto industry trickled in throughout the afternoon. While many indications pointed to strong sales in the month, due to rebates and the improving economy, the first report of the day was less than encouraging.

Ford Motor said that August sales fell 15 percent from the same period a year earlier and that it was cutting its third-quarter production estimate by 10,000 vehicles, and set its fourth-quarter North American production estimate at 890,000 vehicles, down 6 percent from the same period a year ago. Ford (F: down $0.37 to $11.94, Research, Estimates) shares fell 3 percent.

General Motors (GM: up $0.13 to $42.61, Research, Estimates) said that sales fell 0.5 percent in August from a year earlier, but that it had boosted its production schedule by 10,000 vehicles in the third quarter. DaimlerChrysler (DCX: up $0.31 to $39.63, Research, Estimates) said sales in August fell 6 percent from a year earlier. But the news had little impact on either company's stock price.

Wednesday also brought a few big deals, most notably pharmacy benefit manager CaremarkRx's (CMX: down $2.10 to $23.30, Research, Estimates) purchase of rival AdvancePCS (ADVP: up $7.45 to $47.45, Research, Estimates) for $6 billion in stock, cash and debt. AdvancePCS's shares soared 18.6 percent, while CaremarkRx sank 8.3 percent.

Eli Lilly (LLY: down $4.70 to $62.10, Research, Estimates) dropped 7 percent after the Food and Drug Administration gave conditional approval to its experimental treatment for stress urinary incontinence. The drug is the same chemical used in Lilly's new depression drug, and Wednesday's news cast fresh doubts on when the medicine will be approved for that much broader use. Conditional approvals, though encouraging, often represent a significant delay in bringing a new drug to market.

Market breadth was positive and volume was fairly heavy. Almost 1.64 billion shares changed hands on the New York Stock Exchange, where advancing issues outnumbered decliners by five to three. The gainer/loser ratio was more than nine to seven on the Nasdaq, where nearly 2.29 billion shares traded.

The improving volume during Tuesday's session and Wednesday's was significant, said Tim Heekin, head of stock trading at Thomas Weisel Partner, as was the S&P 500's close above a key technical level.

The day's economic numbers were also supportive for the rally. The July reading on construction spending showed an increase to the highest level since the start of the year, but fell slightly short of market expectations. Still, rising mortgage rates failed to prevent a hefty increase in residential construction spending. In addition, June's number was revised upward.

The release of the Fed's "beige book" at around 2 p.m. ET seemed to confirm the recent optimism. The survey of economic conditions in the 12 Fed districts showed that consumer spending held up in July and August and the manufacturing sector showed some slight improvement.

Bond yields were little changed after Tuesday's ascent, with the 10-year Treasury note now yielding 4.59 percent. The dollar fell sharply against the yen and mildly versus the euro.

Markets in Europe closed mostly higher, while stocks in Asia finished their session with mixed results.

NYMEX light sweet crude oil settled at $29.49 a barrel, up 8 cents. COMEX gold added 70 cents to settle at $375 an ounce.