* Q4 advance GDP estimate 2.6 pct vs est. 3 pct growth
* Intel jumps after strong earnings, bullish forecast
* Starbucks falls after weak-holiday qtr sales
* Indexes up: Dow 0.35 pct, S&P 0.56 pct, Nasdaq 0.62 pct (Updates to early afternoon)
By Sruthi Shankar
Jan 26 (Reuters) - The S&P and the Dow scaled new highs on Friday, driven by strong earnings from Intel and drugmaker AbbVie as well as a weaker dollar, putting the three main indexes on track for their best four-week rally since 2016.
Intel’s shares surged about 9 percent to their highest in almost two decades, after results indicated that the chipmaker’s shift to higher-margin data-center business was gaining pace.
AbbVie’s shares hit a record after the drugmaker significantly boosted its 2018 earnings forecast.
The reports helped investors look beyond data that showed U.S. economic growth unexpectedly slowed in the fourth quarter as strong consumer spending resulted in a surge in imports.
Gross domestic product increased at a 2.6 percent annual rate in the fourth quarter, the Commerce Department said in its advance GDP report. Economists polled by Reuters had forecast the economy to expand at a 3 percent rate.
“The Q4 print showed that domestic demand is strong – really strong – and perhaps beginning to push against the capacity constraints of the economy,” market economists at BNP Paribas wrote in a note.
Another set of data showed new orders for key U.S.-made capital goods unexpectedly fell in December.
Markets have moved this week on comments from top U.S. officials at the World Economic Forum in Davos.
U.S. Treasury Secretary Steven Mnuchin’s endorsement of a weak dollar earlier in the week had triggered a slide in the currency. It recouped some of the losses after President Donald Trump said he ultimately wants the dollar to be strong.
The dollar was last down 0.46 percent against a basket of currencies.
At 12:29 p.m. ET (1729 GMT), the Dow Jones Industrial Average rose 93.42 points, or 0.35 percent, at 26,486.21. The S&P 500 gained 15.76 points, or 0.56 percent, to 2,855.01. The Nasdaq Composite was up 45.65 points, or 0.62 percent, at 7,456.81.
Of the 133 S&P 500 companies that have reported quarterly earnings so far, 79.7 percent have topped expectations, versus an average of 72 percent over the previous four quarters.
The S&P healthcare index was the biggest gainer among the 11 major S&P sectors, up 1.3 percent, led by gains in AbbVie, Pfizer and Gilead.
Pfizer rose 3.6 percent after European regulator recommended granting marketing approval to a diabetes drug developed by the company and Merck.
Gilead Sciences jumped 4.4 percent after broker upgraded to “buy”.
Honeywell International rose 1.05 percent after the company raised its forecast for 2018 profit.
Starbucks fell 5.8 percent after it warned 2018 global cafe sales growth would be at the low end of its forecast. The stock was the biggest drag on the Nasdaq.
Declining issues outnumbered advancers on the NYSE by 1,420 to 1,413. On the Nasdaq, 1,451 issues rose and 1,403 fell. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)