Short Interest In Banks Plunges

The short interest in most large banks fell very sharply for the period ending May 29, an indication that traders believe that TARP repayments and ongoing strong earnings mean the fate of American financial firms will continue to improve.

Shares sold short in Bank of America (BAC) dropped 40% to 199.5 million shares. The short interest in BBT (BBT) dropped 30% to 39.9 million. Shares short in US Bancorp (USB) were down 20% to 63.9 million. The short interest in Wells Fargo (WFC) dropped 11% to 107.7 million. Shares short in Goldman Sachs (GS) dropped 24% to 12.4 million and the short interest in American Express (AXP) was down 8% to 42.2 million.

Short sellers made mixed bets on tech. The short interest in Cisco (CSCO) dropped 14% to 44 million shares. Shares short in Dell (DELL) dropped 10% to 40.1 million. The short interest in Brocade (BRCD) was down 12% to 15.7 million shares.

Shorts added to their position in Nvidia (NVDA) where shares short rose 18% to 41.8 million shares. Share short in Yahoo! (YHOO were up 10% to 57 million. shares. Shares sold short in Sandisk (SNDK) were up 20% to 13.6 million. Shares sold short in Adobe (ADBE) were up 13% to 17.7 million. Shares sold short in AMD (AMD) were up 11% to 69 million.

Among other widely held stocks, the short interest in Ford (F) was down 16% to 115.8 million. Shares short in GE (GE) fell 4% to 150.5 million. Shares short in Merck (MRK) were up 15% to 113.9 million. The short interest in Nokia (NOK) rose 14% to 37.6 million.

Data from NYSE and NASDAQ

Douglas A. McIntyre