* Dow on track for best week since January
* Red Hat and BlackBerry ADRs rally after results
* Final GDP reading tops expectations
* Dow up 0.6 pct, S&P 500 up 0.8 pct, Nasdaq up 1.3 pct
By Ryan Vlastelica
NEW YORK, Dec 20 (Reuters) - U.S. stocks rose on Friday, putting the S&P 500 on track for its best week in five months, as unexpectedly strong data on economic growth increased confidence that the recovery was accelerating.
Gross domestic product grew at an annual rate of 4.1 percent in the third quarter, the fastest pace in almost two years, and exceeding the 3.6 percent pace reported earlier this month. Business spending was also stronger than previously estimated.
Until recently, investors have viewed positive data as a negative, as it suggested that the Federal Reserve would begin to trim its stimulus program. The central bank had said it would start tapering its monthly bond buying when certain economic indicators met its targets.
The Fed, however, on Wednesday said it would pare its market-friendly monthly asset purchases by $10 billion to $75 billion, starting in January. It also suggested that its key interest rate would stay at rock bottom longer than previously promised.
"If tapering had not been announced, I don't think this news would be as welcomed by the market as it is right now," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.
"But now, there's no real risk that there will be more tapering any time soon, and on top of that, growth is absolutely stronger than many were expecting."
Fed Chairman Ben Bernanke said that if U.S. job gains continue as expected, then the bond purchases would be cut at a "measured" pace through much of next year, and would probably be wound down "late in the year, certainly not by the middle of the year."
The Dow Jones industrial average was up 103.54 points, or 0.64 percent, at 16,282.62. The Standard & Poor's 500 Index was up 13.55 points, or 0.75 percent, at 1,823.15. The Nasdaq Composite Index was up 50.56 points, or 1.25 percent, at 4,108.70.
The benchmark S&P 500 has soared more than 27 percent this year and is on track for its best year since 1997. The Fed's aggressive economic stimulus program has been the major catalyst for this year's rally.
For the week, the Dow has climbed 3.3 percent - its best week since the first week of the year. The S&P 500 has gained 2.6 percent this week, marking its best week since July. The Nasdaq has also advanced 2.6 percent this week.
Volume is expected to be active as investors deal with the last "quadruple witching" day of the year, which marks the quarterly expiration and settlement of December contracts for stock options, stock index options, stock index futures and single stock futures.
In addition, most U.S. index funds will adjust their portfolios as a result of quarterly rebalancing by index providers. Credit Suisse expects the rebalancing to result in over $30 billion in total trading at today's close.
Red Hat Inc jumped 16.6 percent to $57.12 and ranked as the S&P 500's best performer after the world's largest commercial distributor of the Linux operating system reported third-quarter results above analysts' estimates and raised its full-year forecast.
Blackberry Ltd reported a massive quarterly loss on Friday due to an inventory writedown and asset-impairment charges. Still, BlackBerry's U.S.-listed shares shot up 15 percent to $7.16.
Walgreen Co advanced 3.5 percent to $58.91 after reporting higher first-quarter sales.
Oracle Corp was unchanged at $36.60, pulling back from an earlier modest gain to $36.79, after the No. 2 software maker it would buy Responsys Inc in a deal valued at $1.5 billion. Responsys shares surged 38.8 percent to $27.09.
Jones Group Inc climbed 5 percent to $14.83 after the company said on Thursday that it had agreed to be bought by Sycamore Partners for $1.2 billion.