US STOCKS-S&P 500, Nasdaq hit record high on upbeat Alphabet earnings, GDP data

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* U.S. Q2 GDP growth slows to 2.1%, but tops estimates
* Twitter gains after Q2 revenue beat
* Amazon falls after quarterly profit miss
* Alphabet surges on upbeat Q2 results
* Indexes up: Dow 0.15%, S&P 0.67%, Nasdaq 1.06%

(Updates to early afternoon)
By Amy Caren Daniel
July 26 (Reuters) - Robust earnings from Google-parent
Alphabet and Twitter took the S&P 500 and Nasdaq indexes to
record highs on Friday, with support from data that showed the
domestic economy slowed lesser than expected in the second
quarter.
The Commerce Department said GDP increased at an annualized
rate of 2.1% in the second quarter, higher than a 1.8% rate that
economists polled by Reuters forecast. "GDP growth was not fabulously good and not fabulously bad.
It builds a case for the Fed to cut rates by 25 basis points and
then sit on the sidelines for the remainder of this year," Paul
Nolte, portfolio manager at Kingsview Asset Management in
Chicago.
The data comes on the heels of European Central Bank
President Mario Draghi speech on Monday, which was less dovish
than investors had anticipated and led the S&P 500 to post its
first loss in the week.
Hopes that the Federal Reserve will cut rates at its policy
meeting next week have powered a solid run in stocks this month,
helping Wall Street scale record levels.
Two weeks into the second-quarter earnings season, about 75%
of the 218 S&P 500 companies that have reported so far have
topped profit estimates, according to Refinitiv data.
"It's a tech-driven market, many of the names are able to
grow earnings and revenue at a significant pace as they get
deeper into the global economy and they continue to be the best
place to be in, in the equity market," Nolte said.
Alphabet Inc GOOGL.O surged 10.3% after beating Wall
Street targets on higher ad sales and touted growth at its cloud
unit, a high-margin business it is leaning more on to drive
growth. Twitter Inc TWTR.N rose 8.9% after it posted
better-than-expected second-quarter revenue and an uptick in
daily users who see advertisements on the site. Their upbeat earnings pushed the communication services
sector .SPLRCL up 3.17%, the most among S&P sectors.
At 12:12 p.m. ET, the Dow Jones Industrial Average .DJI
was up 40.15 points, or 0.15%, at 27,181.13, the S&P 500 .SPX
was up 20.02 points, or 0.67%, at 3,023.69. The Nasdaq Composite
.IXIC was up 87.50 points, or 1.06%, at 8,326.04.
Among other stocks, McDonald's Corp MCD.N jumped as much
as 2.1% to hit a record high after beating quarterly sales
expectations at established U.S. restaurants.
Amazon.com Inc AMZN.O fell 1.4% and was the biggest drag
on the benchmark S&P 500 after the online retailer reported its
first profit miss in two years and said income would slump in
the current quarter.
Intel Corp INTC.O reversed course to trade 0.5% lower. The
chipmaker gave an upbeat current-quarter forecast and raised its
full-year revenue guidance. Advancing issues outnumbered decliners by a 1.88-to-1 ratio
on the NYSE and by a 2.34-to-1 ratio on the Nasdaq.
The S&P index recorded 35 new 52-week highs and two new
lows, while the Nasdaq recorded 95 new highs and 60 new lows.