* S&P 500 and Dow erase earlier losses in tech, telecom sectors
* Sterling tumbles as poor UK data stoke recession worries
* Oil prices on track for weekly decline on supply concerns (Adds Wall Street close)
By Richard Leong
NEW YORK, July 22 (Reuters) - U.S. stock prices rose on Friday, marking four straight weeks of gains, while sterling dropped on bleak data that raised fears about a possible British recession following the country's June 23 vote to leave the European Union.
Concerns about global oversupply hurt oil prices, increasing their weekly losses. and gold prices fell on expectations the Federal Reserve may raise interest rates by year-end following a recent batch of encouraging U.S. economic data.
"Earnings have been positive for the most part. You have a strong package of data that have been constructive on the equity market, pushing up bond yields and even taking some shine off gold's recent strong performance," said Quincy Krosby, market strategist at Newark, New Jersey-based Prudential Financial (NYSE:PRU).
The U.S. S&P 500 and Dow equity indexes reversed earlier losses, edging towards record highs hit earlier this week, on renewed strength in the tech and telecom sectors and a stronger-than-expected report on manufacturing. The indexes had fallen earlier on disappointing news from companies including General Electric (NYSE:GE) GE.N and Honeywell HON.N .
The Dow Jones industrial average .DJI closed up 53.62 points, or 0.29 percent, at 18,570.85, the S&P 500 .SPX ended 9.86 points, or 0.46 percent, higher at 2,175.03 and the Nasdaq Composite .IXIC finished up 26.26 points, or 0.52 percent, at 5,100.16.
For the week, the Dow was up 0.3 percent, S&P up 0.6 percent and Nasdaq up 1.4 percent.
Europe's broad FTSEurofirst 300 index .FTEU3 ended little changed at 1,344.11, paring earlier losses linked to lower mining shares and Swedish construction from Skanska SKAb.ST . Nikkei .N225 closed down 1.1 percent.
The MSCI world equity index .MIWD00000PUS , which tracks shares in 45 nations, rose 0.3 points or 0.07 percent, to 412.73.
Among major currencies, sterling booked the biggest daily move, losing nearly 1 percent to $1.3105 GBP=D4 on a dramatic deterioration in British data on manufacturing and services activity in July.
These purchasing manager figures were consistent with a broader 0.4 percent British economic contraction in the third quarter, pushing up the probability of a recession. euro weakened further on news that gunmen attacked a shopping mall in Munich, Germany. It was last down 0.5 percent at $1.0967. dollar index .DXY was up 0.4 percent at 97.410.
The fallout from the Brexit decision is expected to dominate discussions at a weekend meeting of G20 finance ministers and central bank governors in Chengdu, China. solid readings on the U.S. economy have revived bets the Fed may raise interest rates by year-end. That put pressure on gold prices and core government bond yields. 10-year U.S. Treasury yields rose almost 1 basis point at 1.571 percent, while 10-year German bond yields were flat at -0.1 percent EU10YT=RR .
Spot gold prices XAU= fell $6.79 or 0.51 percent, to $1,323.91 an ounce.
The U.S. central bank will hold a policy meeting next week where policymakers are widely expected to keep rates steady.
In the oil market, Brent crude LCOc1 settled down 51 cents or 1.1 percent at $45.49 a barrel. U.S. crude CLc1 settled down 56 cents or 1.25 percent at $44.19 a barrel.