NEW YORK (CNN/Money) - Gains in technology propelled the market to another up session Thursday, but the current rally's legs will be tested early Friday, when the monthly unemployment figures are released.

The Nasdaq composite (up 16.07 to 1868.97, Charts) rose around 0.9 percent Thursday, while the Dow Jones industrial average (up 19.44 to 9587.90, Charts) and the Standard & Poor's 500 (up 1.70 to 1027.97, Charts) index both added 0.2 percent.

Due out at around 8:30 a.m. ET Friday, the August report is forecast to show the unemployment rate held steady at 6.2 percent, consistent with July, while employers are forecast to have added 12,000 jobs to their payrolls after cutting 44,000 in the preceding month, according economists polled by Reuters.

A positive mid-quarter update from Intel issued after the bell is likely to help sustain the tech momentum, but not necessarily kick it up a notch, as the company's news was widely expected. Intel narrowed its revenue forecast to a range of $7.6 billion to $7.8 billion, the upper end of its previous range. Two weeks ago, the leading chipmaker raised its forecast for the quarter. Shares rose 50 cents to $29.10 in after-hours trade.

"Intel already raised their numbers a few weeks ago, so that won't have a big impact on trade, but the employment number could. It's the missing piece in the recovery," said John Hughes, a market analyst at Shields & Co. "If you could get something positive from that number, you could see a stock reaction to the upside, or at least a continuation of what you've been seeing. If it's disappointing, you could see some selling."

Signs of a recovering economy have bolstered stocks for months, but employment has been a worrisome laggard. The August report is the only significant economic news due out Friday and is likely to dictate direction, at least in the morning.

After a surprisingly strong start to the Labor Day-shortened trading week, stocks are headed for a higher five-day total.

"The market's done really well considering it's September," said Joseph Battipaglia, chief stock strategist at Ryan, Beck & Co. "I think that reflects the changing fundamentals and the fact that analysts are expecting better things from the earnings and therefore raising estimates and issuing upgrades, in particular, in the technology sector."

Technology was certainly the motor for Thursday's modest run.

An upgrade of Cisco Systems before the opening bell and a number of chip gear makers continued the week-long parade of analysts cheering the technology sector, pushing the Nasdaq to a seventh straight session of gains, the first such winning streak since February 2000. The tech-spangled index also managed a new 17-month high, closing at its best level since the 1,868.83 it hit on March 21, 2002.

The morning's predominantly upbeat economic news and the boost from the techs also helped push the Dow and S&P to a fifth and eighth day of gains, respectively. Both indexes are at new almost 15-month highs, at their best closes since June 18, 2002. On that day, the Dow closed at 9,706.12 and the S&P 500 index at 1,037.11.

All was not rosy, however. Although the tech-heavy Nasdaq had few problems sustaining momentum, the Dow and the S&P suffered a choppy, tentative ascent, as investors showed reluctance to jump in too eagerly after a surprisingly strong late-summer run.

Among the negatives perturbing investors: the morning's weak jobless number and continued selling of the mutual funds accused of illegal trading practices by the New York Attorney General's office, most notably Janus Capital (JNS: down $1.28 to $15.60, Research, Estimates), which fell 7.6 percent.

Technology stocks remained buoyant. After sitting out the tech run for the last few sessions, chips finally joined in, encouraged in part by a much stronger-than-expected earnings report from National Semiconductor (NSM: up $3.17 to $31.99, Research, Estimates), issued in late morning. NSM shares gained 11 percent, while the Philadelphia Semiconductor index (up 11.19 to 455.55, Charts), or the Soxx, rose 2.5 percent.

Goldman Sachs upgraded Cisco Systems (CSCO: up $0.35 to $20.59, Research, Estimates) to "outperform" from "in-line" one day after the company's CEO said August orders were better than expected. The stock climbed 1.7 percent.

In addition, UBS upgraded Applied Materials (AMAT: up $0.26 to $21.22, Research, Estimates), Novellus (NVLS: up $0.36 to $38.85, Research, Estimates) and KLA-Tencor (KLAC: up $1.38 to $57.91, Research, Estimates), among others, to "buy." All three stocks showed gains of more than 1 percent, with KLA Tencor benefiting the most.

Another Dow component, Procter & Gamble (PG: up $2.63 to $91.43, Research, Estimates), raised its earnings-per-share and revenue outlook for the fiscal first quarter Thursday morning, due to strong initial shipments of its over-the-counter heartburn treatment. The stock rallied just under 3 percent.

On the downside, shares of Gap (GPS: down $2.82 to $18.18, Research, Estimates) tumbled 13.4 percent in active NYSE trade after the clothing retailer reported that August sales at stores open at least a year, or "same-store" sales, rose 4 percent, a gain smaller than both analysts and Gap had forecast.

In addition, WebMD (HLTH: down $0.98 to $9.22, Research, Estimates) lost 9.6 percent in unusually active Nasdaq trade, following its reopening at around 10:30 a.m. ET. Trading in the stock of the health information company had been halted since Wednesday morning as the FBI and the IRS searched three of the company's offices. The searches pertained to a probe of WebMD's physician services unit and a 1999 financial restatement.

The morning's economic news was mostly positive.

A revised reading on productivity showed that it rose at a 6.8 percent annual rate in the second quarter, more than expected and up from the initial reading of 5.7 percent. Another report showed factory orders rose 1.6 percent in July against expectations for a 0.9 percent increase and June's gain of 1.9 percent.

Perhaps the strongest report of the day was the Institute for Supply Management's index on the services sector of the economy, which came in at 65.1 in August, unchanged from the previous month's reading, which was the highest since the survey was first conducted in July 1997. The services sector represents nearly 80 percent of the U.S. economy.

The day's only disappointing economic number was the weekly report on jobless benefits claims. The number of Americans filing new claims for unemployment rose to 413,000 last week from a revised 398,000 the week before. Economists surveyed by Reuters had expected the number of jobless claims to drop. A reading above 400,000 is usually seen as a sign of weakness in the job market.

Market breadth was positive, with advancers topping decliners by nine to seven on both the Nasdaq and the New York Stock Exchange. On the NYSE, 1.44 billion shares traded and on the Nasdaq, 1.85 billion shares changed hands.

Treasury prices gained, sending the 10-year note's yield down to 4.51 percent from 4.59 percent late Wednesday. The dollar rose against the yen and euro.

European markets closed little changed, while Asian stocks ended mixed Thursday.

NYMEX light sweet crude oil futures fell 51 cents to $28.98 a barrel. COMEX gold fell $1 to settle at $374 an ounce.