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127.0.0.1 is a loop back to your own computer.
Here's a thread about that very problem on the Avast forums.
avast.com resolving as 127.0.0.1
I would suggest removing Avast and going with Comodo Internet Security. It's free and I've never had any problems with it.
Antivirus Firewall Software and SSL Certificate - Internet Security Software from Comodo
My Avast hasn't been popping up such alerts.
is this a virus? it isnt doing it now.