* MSCI global stock index edges higher
* U.S. GDP increases at a 3.2% annualized rate
* Oil drops (Updates with oil closing prices)
By Caroline Valetkevitch
NEW YORK, April 26 (Reuters) - Global stock markets edged higher on Friday as data showing U.S. economic growth accelerated in the first quarter offset corporate earnings disappointments, while the dollar fell against a basket of currencies.
The Commerce Department said U.S. gross domestic product increased at a 3.2% annualized rate. The jump in growth was driven by a smaller trade deficit and the largest accumulation of unsold merchandise since 2015, temporary factors that are likely to reverse in the coming quarters.
The dollar index fell 0.24%. The index, which hit a 23-month high earlier in the session, is up for the week.
“Overall, U.S. growth last quarter was outstanding. But the soft inflation components were enough to spur some profit-taking in the buck’s winning week,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Also limiting gains in stocks were tech shares, with Intel Corp down sharply after it cut its full-year revenue forecast and missed quarterly sales estimate for its key data center business. Exxon Mobil and Chevron also were lower following results Friday.
The Dow Jones Industrial Average rose 17.32 points, or 0.07%, to 26,479.4, the S&P 500 gained 5.22 points, or 0.18%, to 2,931.39 and the Nasdaq Composite added 2.39 points, or 0.03%, to 8,121.07.
The pan-European STOXX 600 index rose 0.22% and MSCI’s gauge of stocks across the globe gained 0.18%.
The GDP release sets the stage for a Federal Reserve interest rate decision next week, when investors will try to anticipate how the U.S. central bank will react to mostly resilient indicators of late.
The rebound has not been mirrored in inflation, which remains subdued across much of the developed world, prompting a host of central banks to turn dovish.
Just this week central banks in Sweden and Canada backed off plans to tighten, while the Bank of Japan tried to dispel doubts about its accommodative stance by pledging to keep rates at super-low levels for at least one more year.
The Fed next week is expected to reaffirm its patient stance. A Reuters poll of analysts published on Thursday found most believed the Fed was done with tightening altogether.
Benchmark 10-year U.S. Treasury notes were last up 7/32 in price to yield 2.509%, from 2.534% late on Thursday.
Oil prices sank after U.S. President Donald Trump again pressured the Organization of the Petroleum Exporting Countries to raise crude production to ease gasoline prices.
U.S. crude oil futures fell 2.9% to settle at $63.30 a barrel. Brent crude futures settled down nearly 3% at $72.15.
Additional reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru, Saqib Iqbal Ahmed and Laila Kearney in New York, Ritvik Carvalho in London and Wayne Cole and Swati Pandey in Sydney Editing by Alistair Bell and James Dalgleish