Stocks shot higher in New York, with the Dow industrials soaring more than 300 points after a surprise cut in interest rates by the US Federal Reserve.

The Dow Jones industrial average, up only 110 points with an hour left to trading, rose 330.58 points - or by 4.1 per cent - at 8,299.36, its highest finish since before the late August sell-off.

Broader indexes also shot higher after Fed officials, choosing not to wait for their next scheduled meeting in November, cut the central bank's short-term lending rates for the second time in less than a month.

The Standard & Poor's 500 rose 41.97, or 4.2 per cent, to 1,047.50. The Nasdaq composite index rose 70.04, or 4.6 per cent, to 1,611.01. Advancing issues outnumbered decliners by more than a three-to-one margin on the New York Stock Exchange, with 2,469 up, 678 down and 387 unchanged. NYSE volume totalled 927.31 million shares, up from 782.91 million at the same point on Wednesday.