Stocks rose in New York yesterday, but failed to hold even sharper gains as investors grew wary before a bank holiday weekend that will leave Wall Street unable to react to overseas events for the next three days.

The Dow Jones industrial average rose more than 100 points twice during the day, but finished just 61.78 points - or 0.80 per cent - higher at 7,753.55.

Stocks opened the day higher after the main index on the Tokyo Stock Exchange jumped more than 6 per cent amid expectations the government will take further steps to shore up Japan's troubled economy. Other Asian markets, including Hong Kong, also rose.

Bank and technology stocks were buoyed by the strong showing overseas.