* GE Q4 profit, revenue top estimates
* Google shares lose early gains
* Dow up 0.5 pct, S&P up 0.4 pct, Nasdaq down 0.2 pct (Updates to late afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Jan 21 (Reuters) - The Dow and S&P 500 rose on Friday as General Electric Co's earnings put a positive tone on the earnings season and the economic recovery, setting the market on track to snap a two-day losing skid.
But the Nasdaq slipped, pulled lower by Google paring early gains and turning negative, as confidence that CEO Larry Page would rejuvenate the No. 1 Internet search company wavered. Late Thursday, Google reported earnings that beat Wall Street's expectations.
Shares of General Electric, considered a bellwether for the economy and corporate America, rose 7.9 percent to $19.89 and hit their highest intraday level since November 2008. The stock, the top positive in the Dow, also scored its biggest daily percentage jump since March 2009.
GE reported stronger-than-expected earnings, helped by the recovery of its finance arm and a rise in revenue at its industrial units, including a sharp pickup in sales of locomotives.
"Companies like GE -- it's harder to turn a ship than it is a rowboat -- maybe it's time for these big companies to start outperforming," said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.
"They've been left behind. Maybe they've got their ships turned now."
The Dow Jones industrial average added 62.62 points, or 0.53 percent, to 11,885.42. The Standard & Poor's 500 Index gained 5.33 points, or 0.42 percent, to 1,285.82. But the Nasdaq Composite Index shed 5.54 points, or 0.20 percent, to 2,698,75.
Earlier, the Dow climbed to a fresh 52-week high at 11,905.48.
The S&P 500 is up nearly 9 percent since the start of December, but the index lost more than 1 percent over the past two days. Many technical and other analysts see the up trend continuing through at least the first half of the year, but some have forecast a pullback for the near term.
Google Inc shares were down 0.8 percent at $621.85 after hitting an intraday high of $641.73.
The action in Google shares is "not so much Google earnings, but a factor of the market itself," said Robert Francello, head of equity trading for Apex Capital in San Francisco.
"We had such a massive run in the end of December and early this month, we might be seeing selling into good earnings," he said. "The long, fast money (is) paring gains and preparing themselves for some type of consolidation short term."
Investors are also contending with options expiration, with January options on individual stocks set to expire after the close. The expiry sometimes adds to market volatility.
Tempering some of the earnings optimism were results from Bank of America Corp, the latest bank to disappoint investors.
Bank of America shares fell 1.2 percent to $14.36 after the largest U.S. bank by assets reported a second straight quarterly loss, driven by a $2 billion write-down in its mortgage business.
The results follow disappointing results earlier this week from Goldman Sachs and Wells Fargo. An index of bank shares, KBW Banks, was up 1.7 percent, however. (Reporting by Chuck Mikolajczak; Additional reporting by Caroline Valetkevitch; Editing by Jan Paschal)