NEW YORK (CNN/Money) - Stocks rose for the fourth straight day Thursday as strength in the technology sector gave the broader market a push near the close.

The rally could be challenged early Friday, with Nasdaq and S&P 500 futures pointing to a mixed open, when fair value is taken into account.

The Nasdaq composite (up 11.93 to 2,042.58, Charts) rose 0.6 percent Thursday, closing at a two-month high.

The Dow Jones industrial average (up 28.74 to 10,493.19, Charts) added 0.3 percent and the broader Standard & Poor's 500 (up 5.52 to 1,191.08, Charts) index gained 0.5 percent. Both gauges closed at their highest in more than a month.

"The tone (of the market) is definitely better than it's been in a while, and it feels like we could go a bit higher," said Donald Selkin, director of research at Joseph Stevens.

Selkin said that in addition to the sentiment, some of the background conditions have also improved, "Oil has come down a lot, you're seeing some rotation into the techs and the high-dividend paying Dow stocks, and the S&P 500 cleared a pretty key resistance level."

He said that in the short term at least, it seems reasonable that stocks might continue to rise.

Stocks have been on a tear this week, with the major gauges rising in each of the four sessions. Wednesday marked the biggest day, with the Dow adding 132 points as investors welcomed falling oil prices and tame inflation news, which they interpreted to mean that the Federal Reserve can keep its pace of interest rate hikes "measured."

That optimism ultimately carried over into Thursday, although stocks struggled in early trading on volatile oil prices and some mixed economic news.

But strength in the tech sector amped up by the close and gave the rally a little bit of oomph.

Stocks also got a late-afternoon boost after ratings agency Fitch downgraded Ford Motor (up $0.09 to $10.01, Research) debt, but kept it above junk, adding it was unlikely to cut the automaker below investment-grade status this year. Standard & Poor's and Moody's have already downgraded the automaker's debt, although neither have cut it to junk.

Rival General Motor (up $1.14 to $32.75, Research)'s debt was cut to junk by S&P recently, sparking a stock market sell-off as hedge funds got taken by surprise and investors bailed out of GM bonds. When debt is cut to "junk" status, that can raise borrowing costs, which would make it even more difficult for the troubled automakers to compete in the global marketplace.

Thursday's economic news was mixed, as a surprisingly big drop in weekly jobless claims was countered by a disappointing read on the Philly Fed, a regional manufacturing survey.

Falling oil prices added support, while Treasury bonds edged lower and the dollar rose versus most major currencies.

"The benign inflation data and the belief that the Fed may be closer to the end than had previously been thought has helped the market this week," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

Due to the fact that Friday brings no economic news or market-moving earnings, oil is probably the key in the short term, Ghriskey said. "As long as oil stays benign, the market can hold in; if it (oil) sells off more, stocks can rise more," he added.

After the close, clothing retailer Gap (up $0.20 to $21.74, Research) reported earnings and sales that fell from a year ago, but surpassed estimates, sending shares a bit higher in extended-hours trading.

Techs were among the best performers Thursday, with a number of big caps leading the way, including Apple Computer (up $1.71 to $37.55, Research) and Yahoo! (up $0.80 to $36.75, Research)

Software shares got a boost from BEA Systems (up $0.37 to $8.51, Research), which reported higher quarterly earnings late Wednesday that met estimates, and issued a stronger second-quarter revenue forecast.

Netflix (up $0.63 to $16.13, Research) jumped 4 percent in active trading after Wal-Mart Stores (down $0.07 to $47.51, Research) opted to end its DVD-by-mail rental service and instead market Netflix's brand in a partnership deal.

Among other movers, Motorola (up $0.41 to $17.31, Research) rose 2.4 percent after saying its board approved the repurchase of up to $4 billion in stock over the next three years -- the telecom's first buyback program.

Energy stocks bounced back after sliding for much of the last week. Exxon Mobil (up $1.18 to $54.83, Research) added 2.2 percent and was the Dow 30's best performer. The Philadelphia Oil Services Sector (up $2.34 to $128.57, Research) index added 1.8 percent.

Among the decliners, DuPont (down $0.43 to $47.61, Research) fell nearly 1 percent after saying a federal grand jury has requested documents from the chemical maker related to a product used in making Teflon coatings. The product's safety has been in question.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers five to three on volume of 1.37 billion shares. On the Nasdaq, advancers topped decliners eight to seven as 1.73 billion shares traded hands.

The Philadelphia Fed index, released around noon, fell to 7.3 in May from 25.3 in April, echoing the weakness shown in the recent NY Empire State index, another regional manufacturing index, as well as broader manufacturing surveys.

Economists surveyed by Briefing.com thought it would fall to 18.

Jobless claims fell to 321,000 last week from a revised 340,000 the previous week, according to a separate report. Economists surveyed by Briefing.com thought claims would fall to 330,000.

In other news, the index of leading economic indicators dropped 0.2 percent in April, in line with estimates and after a revised drop of 0.6 percent in March.

U.S. light crude for June delivery fell 33 cents to settle at $46.92 a barrel on the New York Mercantile Exchange, after see-sawing all day.

Treasury prices edged lower, raising the benchmark 10-year note yield to 4.11 percent from 4.08 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and yen.

COMEX gold fell $1.10 to settle at $420.80 an ounce.