* Q4 US GDP data misses estimate
* Microsoft up after strong results; boosts S&P, Nasdaq
* Xerox up after deal with Icahn to split into two
* Indexes up: Dow 1.68 pct, S&P 1.63 pct, Nasdaq 1.52 pct (Updates to early afternoon)
By Abhiram Nandakumar
Jan 29 (Reuters) - Wall Street was higher on Friday after the Bank of Japan cut a key interest rate below zero and Microsoft led a rally in technology stocks.
All three major indexes rose more than 1.5 percent, and all 10 major S&P sectors were higher, led by the 2.28 percent rise in tech shares.
The market was also supported by increased expectations that the Federal Reserve would go slow on future rate hikes, after Friday’s weak fourth-quarter U.S. GDP data.
Intervention by central banks has become key to supporting turbulent markets, roiled by slowing global economic growth.
While the Fed has not ruled out a rate hike in March, the current turmoil and weak data could force it to wait until June.
“You’ve got again a sense that we’re back to an easier central bank environment,” said Steve Blitz, chief economist at ITG.
“On top of that, we had a little bit of a bounce in oil and that gives people hope that maybe the global growth is at least not getting worse,” he said.
Oil prices hovered around $34 per barrel on Friday on hopes that top producers may agree to cut production, but gains were capped after reports said Iran would not lower output.
Investors are still reeling from one of the worst starts to a year as oil prices remain under pressure and fears of a China-led global slowdown grow.
U.S. stocks have failed to sustain rallies in 2016 and are yet to post gains for three days in a row. The S&P 500 has shed 7.4 percent this year through Thursday’s close.
At 12:29 p.m. ET (1729 GMT), the Dow Jones industrial average was up 270.48 points, or 1.68 percent, at 16,340.12, the S&P 500 was up 30.95 points, or 1.63 percent, at 1,924.31 and the Nasdaq Composite index was up 68.68 points, or 1.52 percent, at 4,575.35.
Microsoft was up 5.6 percent at $54.97 on the software giant’s better-than-expected results. The stock was the biggest influence on the S&P 500 and the Nasdaq.
Xerox was up 6.9 percent to $9.86, after announcing a deal with Carl Icahn to split itself into two.
MasterCard was up 5.2 percent at $87.77, and Visa rose 5.5 percent to $73.15, after the world’s top two payments network operators reported better-than-expected quarterly profits.
Chevron’s shares were down 1.3 percent at $84.83, after the oil major reported its first quarterly loss in more than 13 years.
Amazon was down 8.8 percent at $580.40, after the company’s quarterly profit fell way below expectations.
Abbvie was down 3.4 percent at $53.97 after the drugmaker reported lower-than-expected revenue. [nL3N15D5DK
Advancing issues outnumbered decliners on the NYSE by 2,635 to 387. On the Nasdaq, 2,163 issues rose and 562 fell.
The S&P 500 index showed 13 new 52-week highs and seven new lows, while the Nasdaq recorded 19 new highs and 77 new lows. (Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D‘Silva)