* 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 0.05%, S&P 0.48%, Nasdaq 0.84% (Changes comment, updates prices)
By Amy Caren Daniel
July 26 (Reuters) - Robust earnings from Google-owner Alphabet and Twitter took the S&P 500 and Nasdaq indexes close to record levels on Friday, with data showing the domestic economy slowed lesser than expected in the second quarter providing support.
The Commerce Department said GDP increased at a 2.1% annualized rate in the second quarter, higher than a 1.8% rate that economists polled by Reuters forecast.
“It’s a little higher than expected, but on the heels of news from a dovish ECB yesterday and mixed earnings reports, this is another sign that growth is certainly cooler in Q2,” said Mike Loewengart, vice-president of investment strategy at E*Trade Financial in New York.
“It’s important for marketwatchers to remember that it is still meaningful growth and despite it being hotter than most predicted it probably won’t derail the Fed.”
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 by at least 25 basis points at its policy meeting next week have powered a solid run in stocks this month, helping Wall Street scale record levels.
Alphabet Inc jumped 9.8% after its quarterly results beat estimates, easing investor concerns about growth challenges faced by its Google advertising business.
Twitter Inc rose 9.9% 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 up 2.65%, the most among S&P sectors.
At 10:54 a.m. ET, the Dow Jones Industrial Average was up 13.20 points, or 0.05%, at 27,154.18, the S&P 500 was up 14.39 points, or 0.48%, at 3,018.06. The Nasdaq Composite was up 68.95 points, or 0.84%, at 8,307.49.
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.
Among other stocks, McDonald’s Corp jumped as much as 2.1% to a record high after beating quarterly sales expectations at established U.S. restaurants.
Intel Corp pared premarket gains to trade 0.6% lower. The chipmaker gave an upbeat current-quarter forecast and raised its full-year revenue guidance, allaying concerns about a global chip slowdown and curbs on U.S. sales to China’s Huawei Technologies Co.
Amazon.com Inc fell 2%,after the online retailer reported its first profit miss in two years and said income would slump in the current quarter.
Advancing issues outnumbered decliners by a 1.84-to-1 ratio on the NYSE and by a 2.32-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and two new lows, while the Nasdaq recorded 82 new highs and 52 new lows. (Reporting by Amy Caren Daniel and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)