* Trading volumes light ahead of Labor Day holiday
* Indexes on track for fourth straight week of gains
* Chicago PMI, consumer sentiment both top forecasts
* Indexes down: Dow 0.2 pct, S&P 0.1 pct, Nasdaq 0.1 pct (Updates to midday trading)
By Ryan Vlastelica
NEW YORK, Aug 29 (Reuters) - U.S. stocks rose in a quiet session on Friday, as the latest in a string of positive data pushed investors to extend a rally that had been briefly threatened by overseas concerns.
With the day's advance the S&P 500 is on track for its 12th rise of the past 16 sessions. It is also set to close out its fourth straight weekly advance and its sixth positive month of the past seven.
Wall Street fell early in the session after Britain introduced a note of caution into the market, raising its international terrorism threat level to the second highest level in response to possible attacks being planned in Syria and Iraq.
The Britain threat level "doesn't sound good, but unless there's definite news that's worse than things we've already seen recently, the market should be able to process it and move on," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "We've become conditioned to buy on dips. That's almost ingrained in the market."
In the latest economic data, the pace of business activity in the U.S. Midwest rebounded more than expected in August, signaling a pickup in that region's economy. Separately, U.S. consumer sentiment rose more than expected, according to the final August reading from the Thomson Reuters/University of Michigan Surveys of Consumers.
The Dow Jones industrial average rose 16.38 points or 0.1 percent, to 17,095.95, the S&P 500 gained 5.84 points or 0.29 percent, to 2,002.58 and the Nasdaq Composite added 21.47 points or 0.47 percent, to 4,579.16.
For the week, the Dow is up 0.6 percent, the S&P is up 0.7 percent and the Nasdaq is up 0.9 percent, the fourth straight week of gains for all three. For the month of August, the Dow is up 3.2 percent, S&P is up 3.7 percent and the Nasdaq is up 4.8 percent. Both the Dow and S&P have climbed in six of the past seven months.
The day's gains were broad, with nine of the S&P's 10 industry sectors higher on the day. Industrials were the only laggard, down less than 0.1 percent. That group was pressured by United Technologies Corp, which fell 1.2 percent to $107.78.
This week's trading volume has been among the lightest of the year, with action especially muted going into the Labor Day holiday in the United States, for which markets will be closed on Monday.
U.S. shares of AstraZeneca rose 2.1 percent to $75.81 on news the company had moved its immuno-oncology medicine MEDI-4736 into a mid-stage study in colorectal cancer.
Splunk Inc jumped 19 percent to $54.10 a day after posting strong revenue growth and raising its full-year sales outlook. (Editing by Chizu Nomiyama and Meredith Mazzilli)