Stocks in New York shot higher yesterday, adding 257 points to the Dow, as US Federal Reserve chairman Alan Greenspan gave the clearest signal yet that he will fight the global economic crisis with lower interest rates.

The Dow Jones industrial average surged to 8,154 by the close, its highest finish in a month, with more than half of the 257-point gain coming during the final hour of trading.

The gain, the fifth-biggest in points for a single session, left the Dow more than 200 points above this year's starting point of 7,908.25, but still about 1,200 below the July 17th record of 9,337.97.

The Dow Jones industrial average rose 257.21, or 3.3 per cent, to 8,154.41.