NEW YORK (CNNMoney.com) -- The Dow Jones industrial average hit a third straight record close Thursday, as investors shrugged off higher oil prices and rising Treasury yields, and resumed the recent advance.

The direction of Friday's trade will be determined by the morning release of the September employment report, due out at around 8:30 a.m. ET.

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The Dow (up 16.08 to 11,866.69, Charts) added about 0.1 percent, closing at 11,866.69. The Dow briefly touched a record trading high of 11,870.06 around 3:15 p.m. ET before ending below that.

On Tuesday, the Dow first knocked out its old record from January 2000. The blue-chip barometer built on that record Wednesday and then again Thursday.

The S&P 500 (up 3.00 to 1,353.22, Charts) index added 0.2 percent, closing at its highest point since February 2001.

The tech-fueled Nasdaq composite (up 15.39 to 2,306.34, Charts) added 0.7 percent after rising more than 2 percent in the previous session.

Higher oil prices and bond yields gave investors some pause in the morning, but by the afternoon, the bulls were back at work.

Whether investors keep pushing stocks higher or get nervous and back out will likely be determined by the upcoming economic news and what it says about the economy.

"I think there's room to the upside in the market, and I think barring bad numbers related to the jobs or the economy, we should be able to keep rising," said Ron Kiddoo, chief investment officer at Cozad Asset Management.

The latest leg of the rally has been sparked by bets that the economy is slowing, but not heading for a recession, that inflation is under control and that the Federal Reserve can start cutting interest rates early next year.

In light of that, Kiddoo said the short-term risk is Friday's monthly employment report. Should the September report come in too weak, that would raise worries about the speed of the economic slowdown. Should it come in too strong, that might spark concerns about wage inflation.

Alternately, there is some question as to whether the Dow taking out its record is as big a positive as it seems, or whether it is a hedge against a bigger selloff that may be looming.

Matthew Smith, portfolio manager at Smith Affiliated Capital says the rotation out of smaller stocks into large caps that is lifting the Dow right now is a classic defensive move reflecting the reality of a slower earnings picture going forward.

He said that earnings growth will slow in tune with the economy and in anticipation of that, investors are moving out of small caps and into safer, big cap stocks.

"With earnings set to compress, you want to move into more multi-national companies, stocks that pay dividends," he added, "so when the market starts to turn down, you can still make money."

After the close, chipmaker Micron Technology (Charts) reported quarterly earnings and revenue that rose from a year earlier, but missed analysts' estimates, sending shares lower in extended-hours trading.

Investors seem to be of the mindset than the 25 percent drop in crude oil prices from the summer highs means inflation is now under control. A pair of Fed officials looked to temper such bets in speeches given over the last 24 hours.

Late Wednesday, Federal Reserve Vice Chairman Donald Kohn gave a speech in which he discussed upside risks to inflation. Such concerns were echoed Thursday afternoon by Philadelphia Fed President Charles Plosser - who is not a voting member of the Fed's policy setting board.

U.S. light crude oil for November delivery gained 62 cents Thursday to settle at $60.03 a barrel on the New York Mercantile Exchange, after falling to an 8-month low Wednesday.

Oil had rallied even more in the morning on reports that OPEC is planning to cut production by about 1 million barrels per day. However, OPEC's acting president reportedly denied that such a decision had already been made.

The runup in oil prices was good news for recently-battered oil stocks such as Exxon Mobil (up $0.71 to $67.32, Charts) and ConocoPhillips (up $1.10 to $57.88, Charts).

However, for the rest of the market, it was not so welcome, as it reminded investors that consumer spending could be vulnerable should oil prices make a sustained move back toward the summer highs.

Biotech, computer networkers and chipmakers were among the stocks lifting the Nasdaq.

Retailers were also in focus, with a number of chains reporting September sales at stores open a year or more, also known as same-store sales. Sales were generally very strong in the month. Yet that had a mixed impact on the underlying stocks Thursday.

Starbucks (up $2.73 to $38.69, Charts) said late Wednesday that September same-store sales rose 6 percent, topping estimates. Shares jumped 7.6 percent Thursday in active Nasdaq trading.

Teen retailer American Eagle Outfitters (down $0.92 to $45.42, Charts) reported a stronger-than-expected 19 percent rise in September same-store sales and boosted its third-quarter earnings forecast. However, shares fell about 2 percent.

J.C. Penney (down $1.44 to $70.42, Charts) reported stronger September sales and boosted its third-quarter earnings outlook. Yet shares declined 2 percent.

Wal-Mart Stores (down $1.14 to $48.41, Charts), the leading retailer, said Thursday that it is rolling out its discount generic drug program four months ahead of schedule.

However, Wal-Mart stock slid anyway, with investors focusing on the company's news Wednesday that September sales were lower than initially reported, due to what it said was a miscalculation.

Hewlett-Packard (down $0.18 to $37.84, Charts) shares slipped modestly Thursday on news late Wednesday that the California attorney general brought felony charges against former CEO Patricia Dunn and others involved in the company's boardroom leak probe.

Wal-Mart and HP are both Dow stocks and weighed on that index. However, a few of the Dow's economically sensitive stocks bounced and that gave the average some balance. Gainers included Alcoa (up $0.41 to $27.57, Charts), 3M (up $1.05 to $75.92, Charts) and Caterpillar (up $2.70 to $68.24, Charts).

Apple (down $0.55 to $74.83, Charts) said late Wednesday that an internal probe of its past stock-option practices showed errors and as a result, it will likely need to restate past results. The stock lost less than 1 percent.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 11 to 5 on volume of 1.73 billion shares. On the Nasdaq, advancers topped decliners by 2 to 1 on volume of nearly 1.95 billion shares.

COMEX gold for December delivery rallied $8.80 to $575.50 an ounce, after slumping more than $22 Tuesday.

That gave a lift to gold stocks, with the Amex Gold Bugs (up $8.12 to $293.65, Charts) index rising 2.8 percent.

Treasury prices slipped, raising the yield on the 10-year note to 4.60 percent from 4.57 late Wednesday. Bond prices and yields move in opposite directions.

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