NEW YORK (CNNMoney.com) -- Stocks gained Friday afternoon, with the blue chips rising for the fifth of six sessions on bets that the morning's mild reading on inflation means the Federal Reserve won't have to raise rates when it meets again.

The Dow Jones industrial average (up 45.46 to 11,572.85, Charts) added 0.3 percent to come within shouting distance of its record high of 11,722.98, hit on Jan. 14, 2000.

The broader Standard & Poor's 500 (up 4.18 to 1,320.46, Charts) index also added about 0.3 percent as did the Nasdaq composite (up 6.65 to 2,235.38, Charts).

The major gauges had been even higher earlier in the session but lost some steam amid the impact of the quadruple options expiration and some fatigue after the recent rally.

Stocks were mixed Thursday, finding little traction after a four-session advance that had lifted the three major gauges to their highest levels since May.

The Consumer Price index (CPI) rose 0.2 percent in August, as expected. CPI rose 0.4 percent in July.

Of greater interest to inflation watchers, the so-called core CPI, which strips out volatile food and energy prices, increased 0.2 percent, as expected and as it did in July. Prior to July it gained a more worrisome 0.3 percent for four months straight.

The report sent stock and Treasury prices higher, with investors relieved by the moderate inflationary pressure, even during the month of August, when energy prices were higher than they are now. A mild report was particularly welcome ahead of the Fed policy meeting next week.

"All in all, it was a very satisfying report to the markets, exactly as expected," said Stuart Hoffman, chief economist at PNC Financial Services.

Hoffman said that in terms of the Fed, the CPI report doesn't change bets that it will hold steady when it meets Wednesday.

"The Fed has its eye on core inflation, and that's still a concern, but the drop in energy prices in September has been good and as the Fed looks ahead to the September CPI, that drop should help counter inflation," he added.

Investors took in stride the morning's other economic news, including reads on the manufacturing sector and consumer sentiment.

The NY Empire State index, a regional manufacturing report, rose modestly in September but was still short of forecasts. Capacity utilization inched lower in August and was just short of forecasts. Industrial production showed a surprise drop in the month of August, versus forecasts for a modest advance.

The University of Michigan's consumer sentiment index for September inched up from the previous month and surpassed forecasts. The report's forward-looking expectations index gained as well.

Here's what was moving at the close:

Of the stocks in the Dow, 19 rose and 11 fell.

Microsoft (up $0.48 to $26.81, Charts), Boeing (down $0.05 to $74.96, Charts), Honeywell (up $0.76 to $39.79, Charts) and United Technologies (up $1.62 to $64.62, Charts) were among the Dow gainers.

The tech sector has bounced all week amid sector rotation, as investors have pulled money out of oil, gold and silver stocks and put it into tech and other sectors.

Software maker Adobe Systems (up $3.35 to $37.00, Charts) rallied almost 10 percent after reporting quarterly earnings and revenue late Thursday that topped estimates. The company also issued bullish current-quarter earnings and revenue guidance.

On the downside, Ford Motor (down $1.06 to $8.03, Charts) said it is cutting thousands more jobs than previously announced, offering buyouts to all of its 75,000 hourly workers, speeding up plant closings and suspending its dividend in a plan to save $5 billion. Shares slumped 12 percent nonetheless and topped the New York Stock Exchange's most-actives list. (Full story).

Shortly after Ford's announcement, rival DaimlerChrysler (down $3.51 to $49.39, Charts) cut its 2006 profit forecast, citing tough market conditions and higher fuel costs. Shares fell 7 percent.

Market breadth was positive, and trading volume was extremely robust, as a result of Friday's quadruple options expiration.

The quarterly event in which stock index futures and options and individual stock futures and options are expiring simultaneously tends to boost volume. It also adds volatility to the market in the days leading up to and the day of the expiration.

On the New York Stock Exchange, winners beat losers three to two as 2 billion shares changed hands. On the Nasdaq, advancers edged out decliners as 2.5 billion shares changed hands.

U.S. light crude oil for October delivery erased morning losses, turning higher. The price added 17 cents to $63.39 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery fell $3 to $583 an ounce.

Treasury prices edged lower, raising the yield on the 10-year note down to 4.79 percent relatively unchanged from late Thursday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar rose against the euro and was little changed versus the yen.

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