US STOCKS-Alphabet, Starbucks drive Wall Street to record high

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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: Dow +0.19%, S&P 500 +0.74%, Nasdaq +1.11%

(Updates to close)
By Noel Randewich
July 26 (Reuters) - Robust earnings from Alphabet and
Starbucks pushed the S&P 500 and Nasdaq indexes to record highs
on Friday, with support from data showing U.S. economic growth
slowed less than expected in the second quarter.
The U.S. Commerce Department said GDP increased at an
annualized rate of 2.1% in the second quarter, higher than a
1.8% rate forecast by economists polled by Reuters. The GDP data further solidified wide expectations that the
U.S. Federal Reserve will cut interest rates at its policy
meeting next week. Those expectations have powered a solid run
in stocks this month, helping Wall Street scale record levels.
"This is just what the market needed, not so soft that the
economy is slowing down precipitously and not so strong that the
Fed is going to reverse course," said Art Hogan, chief market
strategist at National Securities in New York. "It shows that
the economy is slowing, but not nearly enough to raise any red
flags."
The data comes on the heels of European Central Bank
President Mario Draghi's 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.
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.
Starbucks SBUX.O rallied 8.9% to a record high after the
world's largest coffee chain posted its biggest same-store sales
growth in three years. Alphabet Inc GOOGL.O surged 9.6% after beating Wall Street
targets on higher ad sales and growth at its cloud unit, a
high-margin business it is leaning more on to drive expansion.
Twitter Inc TWTR.N rose 8.9% after it posted
better-than-expected quarterly revenue and an uptick in daily
users who see advertisements on the site. Their upbeat earnings pushed the S&P 500 communication
services index .SPLRCL up 3.25%, the most among S&P sectors.
Lead negotiators for China and the United States are set to
meet in Shanghai on Tuesday for two days in the next round of
talks aimed at settling the U.S.-China trade war. The results of
those talks will affect sentiment on Wall Street.
"Going forward, it's very important not to have a breakdown
in trade talks. And earnings reports need to continue to come in
as they have been - a little better than expectations," said Tom
Martin, a senior portfolio manager at GlobAlt Investments in
Atlanta.
The Dow Jones Industrial Average .DJI rose 0.19% to end
the week at 27,192.45 points, while the S&P 500 .SPX gained
0.74% to 3,025.86. The Nasdaq Composite .IXIC added 1.11% to
8,330.21.
For the week, the S&P 500 added 1.7%, the Nasdaq climbed
2.3% and the Dow rose 0.1%.
Even under the cloud of uncertainty related to trade
conflict, the S&P 500 has risen 21% so far in 2019.
Also on Friday, McDonald's Corp MCD.N jumped as much as
2.1%, briefly hitting a record high after beating quarterly
sales expectations at established U.S. restaurants. Inc AMZN.O fell 1.6% 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 lost 1.1%, even after the chipmaker gave
an upbeat current-quarter forecast and raised its full-year
revenue guidance. Advancing issues outnumbered declining ones on the NYSE by a
2.04-to-1 ratio; on Nasdaq, a 2.34-to-1 ratio favored advancers.
The S&P 500 posted 41 new 52-week highs and two new lows;
the Nasdaq Composite recorded 111 new highs and 79 new lows.
Volume on U.S. exchanges was 5.9 billion shares, compared
with the 6.3 billion-share average for the full session over the
last 20 trading days.