if your arms are stretched and straight out, then yeah, you have a bit of a bike fit issue. a shorter stem would probably help, but like metabike said, it might be you have a large top tube, the frame is too large for you, the saddle might be too far back, etc. you can adjust your saddle, you can't do anything about the bike frame, and you can adjust your stem lenght/height. go to a bike shop you trust and they should help.