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* Solid Italy debt sale strengthens euro after election * U.S. stocks rise; focus on Bernanke * World stocks also gain; U.S. bonds up By Caroline Valetkevitch NEW YORK, Feb 27 (Reuters) - Global stock indexes rose on Wednesday as Federal Reserve Chairman Ben Bernanke repeated his strong support for the Fed's stimulus efforts, while the euro edged up after solid demand at an auction of Italian government debt. Bernanke's comments came in his second day of testimony in Congress. His defense on Tuesday of the Fed's monetary stimulus, which eased worries over a possible early retreat from its policy of bond purchases, helped the S&P 500 rebound from its worst decline since November. "Bernanke's comments will keep liquidity in place in the market and every dip now is being viewed as an opportunity to get in," said Dan Veru, chief investment officer at Palisade Capital Management, in Fort Lee, New Jersey. Some markets also were relieved as Italy sold all 6.5 billion euros of the 5- and 10-year bonds offered to investors. It could have chosen to sell less, though it paid more than half a percentage point more in interest than before its election. Two days after the vote offered no party a majority, markets had been concerned about the country's finances. Investors fear the strength of the vote for anti-austerity parties in Italy could weaken efforts to reform public finances and labor laws and damage the euro zone's efforts to resolve its three-year old debt crisis. Italian bonds and those of other euro zone countries suffering concern over their creditworthiness were helped by the sale, with safe-haven German bonds falling before recouping losses. The euro rose as high as $1.3129 and last traded at $1.3118 EUR=, up 0.4 percent on the day. The MSCI world equity index was up 0.6 percent, and the pan-European FTSEurofirst 300 index rose 0.9 percent, both gaining along with U.S. stocks. On Wall Street, the Dow Jones industrial average was up 93.43 points, or 0.67 percent, at 13,993.56. The Standard & Poor's 500 Index was up 11.63 points, or 0.78 percent, at 1,508.57. The Nasdaq Composite Index was up 29.39 points, or 0.94 percent, at 3,159.04. Italian 10-year yields fell 7 basis points to 4.83 percent in the secondary market while German Bund futures were up 27 basis points on the day at 145.09 after the sale. Italy and Spain's need to change the shape of their economies, boost growth and reduce debt, have been at the heart of the euro zone's troubles for over a year. But fears have eased substantially since the European Central Bank said it would do whatever was necessary to prevent a break-up of the euro. U.S. BOND PRICES UP U.S Treasuries gained in price and benchmark yields traded near their lowest levels in a month as concern over the effect of government spending cuts on U.S. economic growth boosted demand for safe-haven debt. Benchmark 10-year Treasuries gained 2/32 in price to yield 1.88 percent, down slightly from 1.89 percent late on Tuesday. The notes have rallied from yields of around 2 percent last week.