* Major indexes set for fourth straight positive week
* GE, Honeywell fall after quarterly reports
* AT&T, Verizon lead telecoms higher
* Indexes up: Dow 0.15 pct, S&P 0.34 pct, Nasdaq 0.49 pct (Updates to late afternoon)
By Lewis Krauskopf
July 22 (Reuters) - Wall Street edged up on Friday back toward record levels, as AT&T and Verizon led telecom stocks higher, but gains were limited by weakness in industrials after General Electric's tepid quarterly report.
The major U.S. indexes were poised to notch their fourth straight positive weeks.
The S&P and Dow have broken to all-time records in the past two weeks for the first time in more than a year amid a second-quarter corporate earnings season that has been better than feared.
Also on Friday, a U.S. manufacturing report came in above expectations, building on strong data from earlier in the month.
"Below it all is just an ongoing trend of better economic reports," said Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "Some of those are earnings reports, but they all line up to the same thing: It looks like growth is quickening."
The Dow Jones industrial average rose 27.81 points, or 0.15 percent, to 18,545.04, the S&P 500 gained 7.46 points, or 0.34 percent, to 2,172.63 and the Nasdaq Composite added 24.85 points, or 0.49 percent, to 5,098.76.
Nine of 10 sectors were higher, led by utilities and telecoms - defensive, high-dividend-paying groups that have lifted the market this year.
AT&T climbed 1.1 percent after its results. Verizon rose 1 percent. The company is the front-runner for Yahoo's core business, Reuters reported. Yahoo was up 1.1 percent.
Industrials were the lone sector in negative territory, dragged down by a 1.9-percent decline in GE shares. The U.S. industrial conglomerate reported weak demand for new oil, gas and transportation equipment.
Rival Honeywell fell 2.5 percent after the diversified manufacturer lowered its full-year sales forecast.
Still, second-quarter earnings for S&P 500 companies, which started reporting in earnest this week, are now expected to decline by only 3 percent, less severe than the 4.5 percent drop estimated at the start of the month, according to Thomson Reuters I/B/E/S.
Results from about 40 percent of the S&P 500 are due next week.
Investors will also be watching the Federal Reserve's meeting next week for clues about when the U.S. central bank might next seek to raise interest rates.
Advancing issues outnumbered declining ones on the NYSE by a 1.90-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favored advancers.
The S&P 500 posted 33 new 52-week highs and no new lows; the Nasdaq Composite recorded 91 new highs and 18 new lows. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza and Nick Zieminski)