Not really enough info provided to be of much help. Mostly, is it a threaded, or threadless steerer? It's not really that the steerer tube is too short. The steerer length is determined by the heat tube lenght and enough extra steerer to accommodate to required hardware. You may not have enough steerer length to accommodate spacers.
Andy alluded to the fact that the "reach" may be too long. 120mm stems are longish, and a shorter reach would have the same affect in position as a more upright stem. There are stems that are both shorter in reach, and higher. Would something like this solve the problem?
Universal Cycles -- Dimension 4 Bolt Stem Black