* Wall St extends gains for third day * Fed bond buying could be more aggressive than new timeline -Dudley * Precious metals rebound, oil extends gains By Angela Moon NEW YORK, June 27 (Reuters) - World equity markets and bonds gained on Thursday, showing further signs of stabilizing from a dramatic selloff as investors' view strengthened that major central banks' monetary stimulus measures would stay in place for the time being. Major U.S. stock indexes rose more than 1 percent after a Federal Reserve official reiterated that any change in monetary policy will depend on data. A number of upbeat U.S. economic reports on the housing sector and consumer spending further eased worries over whether the world's biggest economy could withstand the winding down of the Federal Reserve's monetary stimulus. Federal Reserve Bank of New York President William Dudley stressed in a speech that the newly adopted timeline for reducing the pace of bond buying depends not on calendar dates but on the economic outlook, which remains quite unclear. "The Fed had to be shocked at how much of a move Bernanke's testimony generated ... so now it is trying to alter expectations," said Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati. Equities have been volatile ever since Fed Chairman Ben Bernanke said last week the central bank's bond-buying program, credited with fueling the market's 13 percent jump in 2013, would be reined in earlier than expected if economic conditions improve. The benchmark S&P 500 dropped as much as 4.8 percent in the days following a June 19 statement from the Federal Reserve. U.S. Treasuries prices gained on Thursday before the Treasury's auction of $29 billion of seven-year notes, the final sale of $99 billion in new coupon-bearing supply this week. Treasuries have held a firmer tone this week. Benchmark 10-year Treasuries were last up 13/32, the yield at 2.4907 percent, after earlier trading as low as 2.47 percent. MARKETS RECOVER European shares ended higher on Thursday, with the FTSEurofirst 300 index of top European shares provisionally closing 0.7 percent higher at 1,157.42, rallying for the third straight day. The index, still down nearly 8 percent since late May, managed to cross back above a major resistance level representing the index's 200-day moving average, sending a positive technical signal. MSCI's world share index rose 1.02 percent to its highest level in a week. The Dow Jones industrial average, though off its highs, was up 102.74 points, or 0.69 percent, at 15,012.88. The Standard & Poor's 500 Index was up 10.98 points, or 0.68 percent, at 1,614.24. The Nasdaq Composite Index was up 28.91 points, or 0.86 percent, at 3,405.13. Since the sharp decline last week, the S&P 500 has rebounded to climb 1.9 percent over the past two sessions as economic data and comments from Fed officials quelled fears of an earlier-than-expected pullback of stimulus. Brent crude oil rose for a fourth session to above $102 a barrel and was on track for its longest stretch of daily gains since mid-March. U.S. crude was up $1.53 at $97.03. The dollar last traded up 0.7 percent at 98.39 yen, edging toward Monday's peak of 98.70 yen. But traders said its rise could be capped on large sell orders above 98.70 yen. The euro was near flat at $1.3015, with the low at $1.2999. YIELDS YIELD With the yield on benchmark 10-year U.S. government debt appearing to have stabilized at around 2.5 percent, euro zone bonds from Germany to Greece were able to claw back some of the ground lost during the recent global selloff. Reflecting the recent rise in yields generally over the last few weeks, Italy paid its highest rate since March at a 5 billion euro auction of 10- and 5- year debt. But healthy demand boosted its bonds to top the list of periphery performers. Markets also focused on a deal hammered out by European authorities overnight designed to shift the burden of paying for bank bailouts away from taxpayers, although economists' opinions on the deal were mixed.