Stocks ended almost unchanged Thursday in volatile trading as investors weighed another drop in oil prices against lackluster monthly sales figures from retailers and higher-than-expected weekly jobless claims.

The Dow Jones industrial average (search) dipped 5.10 points, or 0.05 percent, to finish at 10,585.12. The Standard & Poor's 500 Index (search) was down 1.04 points, or 0.09 percent, to end at 1,190.33. But the Nasdaq Composite Index (search) rose 5.34 points, or 0.25 percent, to close at 2,143.57, a 10 1/2-month high.

The pause came a day after Wall Street posted sharp gains, with the S&P 500 closing at its highest in nearly 3-1/2 years after oil prices tumbled.

After Thursday's closing bell, shares of Intel Corp. (INTC) initially shot 8 percent higher to $24.70 after the largest maker of microchips raised its quarterly revenue target and cited strong worldwide demand for its microprocessors. During the regular session, Intel fell 1.7 percent, or 39 cents, to close at $22.71.

Later, Intel gave up some of its after-hours gains, but the stock was still up $1.64 at $24.35 on Inet.

"This is very good news," said Steve Neimeth, portfolio manager for AIG SunAmerica Mutual Funds, who oversees funds owning 200,000 shares of Intel. "The Nasdaq should be very strong tomorrow, and I expect that will spill over into the whole market."

In sizing up Thursday's quiet regular session after Wednesday's rally, Ted Oberhaus, manager of equity trading, at Lord Abbett & Co., said, "The market is doing a great job of digesting these gains. I wouldn't consider this to be a down market — it's a very fine performance after a day like yesterday."

Investors were focused on Friday, when a key indicator on jobs — the November U.S. nonfarm payrolls data — will be released at 8:30 a.m. Economists polled by Reuters forecast that the economy added 180,000 jobs in November, after October's unexpectedly big gain of 337,000. The jobless rate is expected to slip to 5.4 percent in November from 5.5 percent in October.

"There's usually caution in front of the employment report — it's a pretty typical pattern that there isn't usually a huge price move in either direction ahead of it," said Paul Cherney, chief market analyst at Standard & Poor's.

Investors were nervous after the Labor Department (search) reported a sharp rise in first-time unemployment claims, which climbed 25,000 to 349,000 last week. Wall Street had been expecting an increase of just 7,000.

Likewise, retail sales reports for November were disappointing, with a number of top retailers issuing lower-than-expected sales reports as the holiday shopping season got under way. With two-thirds of the U.S. economy powered by consumer spending, many investors hoped that strong holiday spending would boost the economy through the end of the year. Wal-Mart Stores Inc. (WMT) fell 20 cents to $52.62 after it said November sales rose just 0.7 percent in November, matching reduced expectations.

"Obviously retail sales are a major concern going forward, but the falling oil prices will definitely help the market," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "If we can stabilize around the $40 level, we'll see a pretty good year-end rally in stocks."

Oil prices fell for the second straight session, with crude for January delivery dropping $2.24 to settle at $43.25 a barrel on the New York Mercantile Exchange (search).

The sharp drop in crude oil prices for the second straight session knocked down shares of energy-related companies. While lower oil prices are good for the stock market as a whole because they help corporate profits and consumer spending, they are bad for energy-related companies.

Exxon Mobil Corp. (XOM), a Dow component, fell 2 percent, or 98 cents, to $50.17, and rival ChevronTexaco Corp. (CVX) dropped nearly 2 percent, or $1.00, to $52.48.

Other retailers saw their November sales fall compared to a year ago, including Pier 1 Imports Inc., Federated Department Stores Inc. (FD) and Limited Brands Inc (LTD), which operates Victoria's Secret and Bath & Body Works. Pier 1 slumped 42 cents to $18.30, Federated lost 15 cents to $55.07 and Limited Brands was down 66 cents at $23.94.

A few retailers managed solid gains, led by J.C. Penney Co.'s (JCP) 12 percent rise in November sales from a year ago. American Eagle Outfitters Inc. (AEOS) and Bebe Stores Inc. also saw strong sales. J.C. Penney nonetheless fell 20 cents to $38.90, while American Eagle climbed 33 cents to $43.29 and Bebe gained 4 cents to $38.99.

Microsoft Corp. (MSFT) slipped 16 cents to $27.09 on the day it paid out its $32 billion special dividend. Microsoft announced the special one-time payout in July.

But the Nasdaq got a lift from Starbucks Corp. (SBUX), the world's largest coffee shop chain. Starbucks shares rose nearly 2 percent a day after the company said sales at stores open at least 13 months, or same-store sales, jumped 13 percent in the four weeks ended Nov. 28. Starbucks stock was up $1.10 at $58.65.

Federal regulators said Kmart Holding Corp. (KMRT) overstated its past earnings and improperly accounted for millions of dollars in vendor payments before the retailer entered bankruptcy in 2002. Kmart fell 13 cents to $103.92.

Trading was heavy, with 1.77 billion shares changing hands on the New York Stock Exchange, above the 1.4 billion daily average for last year. About 2.40 billion shares were traded on Nasdaq, above the 1.69 billion daily average last year.

Decliners outnumbered advancers on the NYSE by 5 to 3, and were about even on Nasdaq.

The Russell 2000 index of smaller companies was down 1.18, or 0.18 percent, at 642.51.

Overseas, Japan's Nikkei stock average surged 1.75 percent. In Europe, Britain's FTSE 100 closed up 0.33 percent, France's CAC-40 gained 0.39 percent for the session, and Germany's DAX index climbed 0.73 percent.

Reuters and the Associated Press contributed to this report.