* Trading volumes light ahead of Labor Day holiday
* Major indexes notch fourth straight week of gains
* Chicago PMI, consumer sentiment both top forecasts
* Indexes up: Dow 0.11 pct, S&P 0.33 pct, Nasdaq 0.5 pct (Updates to close)
By Chuck Mikolajczak
NEW YORK, Aug 29 (Reuters) - U.S. stocks closed out a strongmonth on a quiet note on Friday, with the S&P 500 posting amodest gain to close at a new record as the latest positive datahelped extend a rally that had been briefly threatened byoverseas concerns.
Since falling to a near three-month low on Aug. 7, the S&P500 has risen in 12 of the past 16 sessions. It is also closedout its fourth straight weekly advance and sixth positive monthof the past seven. Friday's gains pushed the index to its latestrecord close of 2,003.37, its third finish above 2,000 thisweek.
Wall Street initially lost ground after Britain introduced anote of caution into the market, raising its internationalterrorism threat level to the second highest in response topossible attacks being planned in Syria and Iraq.
In the latest economic data, business activity in the U.S.Midwest rebounded more than expected in August, signaling apickup in that region's economy. Separately, U.S. consumersentiment rose more than expected, according to the final Augustreading from the Thomson Reuters/University of Michigan Surveysof Consumers.
"We reached and closed above the 2,000 milestone this weekand that gets the mental obstacle out of the way," said AndreBakhos, managing director at Janlyn Capital LLC inBernardsville, New Jersey.
"Economic numbers have been positive for the most part,people are drawing comfort from these numbers, using them as ajustification for optimism."
Economic numbers have helped to offset geopoliticalconcerns, with flare ups in the conflict between Ukraine andRussia helping to curb gains. Ukraine called for full membershipin NATO on Friday, its strongest plea yet for Western militaryhelp, after accusing Russia of sending in armored columns thathave driven back its forces on behalf of pro-Moscow rebels.
The Dow Jones Industrial average rose 18.88 points,or 0.11 percent, to 17,098.45, the S&P 500 gained 6.63points, or 0.33 percent, to 2,003.37 and the Nasdaq Composite added 22.58 points, or 0.5 percent, to 4,580.27.
For the week, the Dow rose 0.6 percent, the S&P advanced 0.7percent and the Nasdaq was up 0.9 percent, the fourthconsecutive week of gains for all three. For the month ofAugust, the Dow added 3.2 percent, the S&P gained 3.8 percentand the Nasdaq finished 4.8 percent higher. The S&P's gainmarked its best monthly performance since February.
The week's trading volume has been among the lightest of theyear, with action muted going into the Labor Day holiday in theUnited States. Markets will be closed on Monday.
Volume was thin, with about 3.8 billion shares traded onU.S. exchanges, well below the 5.29 billion average so far thismonth, according to data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the NYSE by2,117 to 890, while on the Nasdaq, advances beat declines 1,882to 790. (Editing by Chizu Nomiyama, Meredith Mazzilli and Andre Grenon)
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