Shorts Flee Strongest Stocks

Stocks with strong balance sheets that are likely to post good earnings have lost their interest for short sellers. Base on data as of June 30, short sellers abandoned the shares of Citigroup NYSE: C), Exxon Mobil (NYSE: XOM), Ford (NYSE: F), and AT&T (NYSE: T).

The short interest in AT&T fell 18% to 50.3 million shares. Citigroup’s short position fell 13% to 432.8 million, although it continued to have the largest number of shares sold short of any public company. Shares sold short in Exxon Mobil were down 60% to 41.3 million. The short interest in Ford dropped 6% to 275.7 million.

Shares in companies with weak prospect rose.The short interest in Sprint-Nextel (NYSE: S) was up 16% to 84.8 million. The short interest in Boston Scientific (NYSE: BSX) was up 18% to 43.2 million Shares short in JC Penney (NYSE: JCP) were up 30% to 24.9 million. The short interest in Office Depot (NYSE: ODP) was up 19% to 25.3. And share short in Vonage (NYSE: VG) rose 145% to 6.4 million.

Short seller were split on tech shares, but mostly by narrow margins. Shares sold short in Microsoft Corporation (NASDAQ: MSFT) rose 8% to 87.2 million. The short interest in Intel (NASDAQ: INTC) was up 3.4% to 67.1 million. Shares short in Dell Computer rose 11% to 53.8 million.

The short interest in Cisco (NASDAQ: CSCO) fell 26% to 30.1 million. Shares short in Oracle (NASDAQ: ORCL) were down 8% to 25.7 million. And shares short in QUALCOMM (NYSE: QCOM) dropped 9% to 22.9 million