Updates prices throughout, adds analyst comment

By Chibuike Oguh and Huw Jones

NEW YORK/LONDON, Aug 9 (Reuters) -Global shares slightly extended gains on Friday, recovering further from their recent big sell-off and boosted by positive economic data, even as crude oil prices edged higher amid supply concerns from a possible widening of the Middle East conflict.

A trio of Federal Reserve policymakers indicated on Thursday that they were more confident that inflation is cooling enough to cut rates, and this - along with a bigger-than-expected fall in U.S. jobless claims data - helped to underpin the recovery.

On Wall Street, the three main indexes were advancing in choppy trading led by gains in technology, energy, healthcare, financials and real estate stocks.

The Dow Jones Industrial Average .DJI rose 0.11% to 39,489.37, the S&P 500 .SPX gained 0.31% to 5,335.80 and the Nasdaq Composite .IXIC gained 0.24% to 16,699.52.

The MSCI All Country stock index .MIWD00000PUS, was up 0.55% to 786.10 points, recovering much of the ground lost during the week.

"We've had some good news in terms of some good earnings reports and the hiring data yesterday was pretty solid as well," said Tiffany Wade, senior portfolio manager at Columbia Threadneedle Investments. "But after a pretty strong week relative to the last few weeks people are a little bit nervous to keep on a ton of risk going into the weekend and a fresh week," she added.

Oil prices LCOc1 were headed for weekly gains as fears of a widening Middle East conflict persisted, with Brent LCOc1 crude futures up 0.77% at $79.78 a barrel while U.S. West Texas Intermediate crude futures CLc1 added 1% to $76.98.

In Europe, the STOXX .STOXX index of 600 companies was up 0.57%,with the loss for the week all but erased. In a sign of calmer nerves, the VIX .VIX index, also known as Wall Street's 'fear gauge', tumbled nearly 10%, a far cry from its record one-day spike on Monday.

Divergent central bank interest rate moves, a repricing of recession probability in the United States, thinner liquidity in August accentuating volatility and Middle East tensions had all combined a week ago to trigger the sharp sell-off in stocks after their months-long winning streak.

Some analysts urged caution despite this week's strong recovery. "We are still in the month of August, so we can still have some volatility," said Marie de Leyssac, portfolio manager at Edmond de Rothschild Asset Management.

NIKKEI RECOVERS

Japan's Nikkei .N225 stocks benchmark closed 0.56% higher, erasing most of the losses since a 12.4% crash on Monday. It finished the week down nearly 2.5%. The yen JPY=EBS also weakened against the dollar, last trading at 146.61 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 1.63%, more than reversing the drop from Thursday. For the week, it has reversed earlier losses down slightly down 0.12%.

The U.S. dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, was off a one-week high against other major currencies. It fell 0.12% at 103.16, with the euro EUR= up 0.03% at $1.0915.FRX/

Bond yields have climbed this week with safe-havens in less demand, but began easing as confidence returned to markets. The yield on benchmark U.S. 10-year notes US10YT=RR fell 5.3 basis points to 3.944%.

Gold prices were a touch firmer, with spot gold XAU= added 0.26% to $2,433.11 an ounce. U.S. gold futures GCc1 gained 0.21% to $2,427.40 an ounce.

Reporting Chibuike Oguh in New York and Huw Jones in London; Editing by Ana Nicolaci da Costa, Gareth Jones and Josie Kao

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