US stocks rallied yesterday, helped by strength in technology stocks, a rise in the dollar against the yen, and optimism the Federal Reserve will not raise interest rates when it meets in early October.

The Dow Jones industrial average rose 66.17 points, or 0.62 per cent, to close at 10,803.63. For the week, the average fell 224.80 points.

The Nasdaq composite index rallied 62.90 points, or 2.24 per cent, to 2,869.62. Strong gains in shares of personal computer makers, networking companies and semiconductors boosted the technology-heavy index.

The Standard and Poor's 500 index closed up 16.94 points, or 1.28 per cent, at 1,335.42.

In the broader market, 1,687 advancers beat 1,216 decliners on strong volume of 842.6 million shares on the New York Stock Exchange. It was the first time in six sessions the margin of rising stocks to falling stocks ended on a positive note.

For the week, NYSE volume totalled 3.76 billion shares.

Another support for stocks was a rally in the dollar against the yen, undoing some of the yen's big gains against the dollar in the past few weeks. The dollar closed higher at 107.13 against the yen, compared with Thursday's 105.10 close.

The session showed little of the choppy weakness that has plagued this week's trading despite the "triple witching" expiration of options, index options and futures. Analysts said the expiration, which was seen to have hurt stock prices in prior sessions, ultimately had a leveling-out impact.

The 30-year US Treasury bond rose 12/32, pushing its yield down to 6.05 per cent from 6.08 per cent on Thursday.

Financial stocks lifted the Dow. Goldman's Cohen said fears about inflation and interest rates moving higher, which have battered financial services stocks recently, are not warranted and are "spectacularly premature", making the sector a very good value opportunity.