Stocks looked set to make their best monthly advance since November on Friday in a seesaw session as a drop in the U.S. dollar offset economic reports that came in mostly weaker than expected.

Buoying stocks was data showing the U.S. economy grew a tad more than initially thought in the fourth quarter. In its second reading, the Commerce Department said gross domestic product grew at an annual rate of 5.9 percent, up from the 5.7 percent annual pace estimated last month.

But a surprisingly sharp drop in existing home sales in January and weak consumer sentiment in February underscored the uneven nature of the economic recovery.

Consumer staples' shares were hurt by the data, with Walgreen Co down 2.1 percent at $35.26.

There was a lot of economic data this morning, most of them worse than expected, said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. Offsetting that is the fact that the dollar has declined somewhat and, in general, when the dollar has been declining, that's positive for equities.

The greenback fell as investors pared extreme short positions in the euro. An earlier report that Germany may consider buying Greek bonds as an emergency measure had pushed the euro to a session high.

Fears about a possible default by heavily-indebted Greece have rattled investors for weeks, but those worries have shown signs of ebbing.

The Dow Jones industrial average <.DJI> edged up 14.44 points, or 0.14 percent, to 10,335.47. The Standard & Poor's 500 Index <.SPX> added 2.13 points, or 0.19 percent, to 1,105.07. The Nasdaq Composite Index <.IXIC> gained 5.26 points, or 0.24 percent, to 2,239.48.

The Dow and the S&P 500 were on track to post their best monthly gains since November, while the Nasdaq looked set for its best advance since December.

Even so, all three major stock indexes were on track to post a negative week, following two weeks of gains.

A snowstorm that began on Thursday and forced closures of schools and businesses across the Northeast kept a number of traders home, as well, leading to expectations of lower volume on Friday.

Volumes are trading as if it's a holiday weekend. Volumes are remarkably light, said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.

Healthcare stocks were among the day's winners, with Cigna adding 1.4 percent to $34.33. A seven-hour healthcare summit on Thursday did little to budge Republican lawmakers on industry reform.

Financials also gained. Dow component JP Morgan Chase & Co rose 3.4 percent to $42.04. But American International Group Inc slid 9.7 percent to $24.85 after it reported a quarterly loss of $8.9 billion, hurt by an increase in its loss reserves and its efforts to repay loans from the U.S. government.

(Reporting by Leah Schnurr; Additional reporting by Luciana Lopez; Editing by Jan Paschal)