NEW YORK (CNNMoney.com) - Stocks struggled to stay positive Thursday morning as investors welcomed lower oil prices, but played it cautious ahead of key reports on housing and manufacturing, due shortly.

But absent a major "Santa Claus" rally later today and Friday, the market looks set to end with lackluster returns in 2005.

The Dow Jones industrial average (Charts) and the broader S&P 500 (Charts) index managed small gains in the early going Friday.

The Nasdaq composite (Charts) index was little changed.

U.S. light crude oil for February delivery lost 28 cents to $59.54 in electronic trading, ahead of the weekly oil inventory report due out in less than an hour.

The drop in oil prices gave stocks some early support, but countering that was a rise in jobless claims. Reports on existing home sales and manufacturing in the Midwest region are due shortly.

As a choppy year draws to a close, the Dow is up just 0.2 percent for 2005, while the S&P is up 3.8 percent this year and the Nasdaq has risen 2.5 percent.

Among stock movers, Dow component Merck (Research) added 1.5 percent after Morgan Stanley raised its price target on the drugmaker.

The 30-share Dow managed modest gains Wednesday, moving back into positive territory for the year after the market took a drubbing earlier in the week. But the broader market was mixed as investors took in rising oil prices and kept an eye on the yield curve.

For two days running, the 10-year note yield has briefly dipped below that of the two-year -- a so-called inversion of the yield curve that could signal an economic slowdown. (For more, click here.)

Such concerns remained in place Thursday, although the curve flattened out. Treasury prices inched higher, lowering the yield on the 10-year note to 4.37 percent from nearly 4.38 percent Wednesday.

The dollar was barely higher versus the euro and yen.

COMEX gold for February delivery jumped $2.40 to $518.70 an ounce.

In global trade, Asia's Nikkei rose nearly 1 percent was heading for its best year since 1986, while European markets rose at midday.