Short Sellers Move Back Into Banks, Tech

Short sellers pushed back into banks and other financial firms during the period that ended on July 15. It may be that they sensed earnings would be weak. Or, that the recent financial reform legislation would hamper profits down the road. Concerns remain that write-offs for residential and commercial mortgages will rise. The banking sector, in short, has more potential risks that rewards.

Share sold short in Wells Fargo (NYSE: WFC) rose 7% to 52.5 million. The short interest in Bank of America (NYSE: BAC) was up 8% to 104.5. Citigroup (NYSE: C) kept its place as the most shorted stock on US exchanges with a position of 449.8 million shares, up slightly from the June 30 figure.Short sellers also took larger positions in retail stocks, a sign that many investors are betting that a slowing in consumer spending and drop in consumer sentiment will hurt the industry. Shares short in Lowe’s (NYSE: LOW) rose 51% to 6.1 million. The short interest in Target (NYSE: TGT) was up 15% to 16 million. The short interest in Limited Brands (NYSE: LTD) was up 34% to 9.6 million. Shares short in American Eagle Outfitter (NYSE: AEO) was up 32% to 13.2 million. Shares short in Gap (NYSE: GPS) rose 25% to 21.8 million.

Short sellers also increased bets against the big tech firms. Shares short in Microsoft Corporation (NASDAQ: MSFT) were up 7% to 93.3 million. The short interest in Intel (NYSE INTC) rose 10% to 74 million. Shares short in Oracle (NASDAQ: ORCL) were up 44% to 37.2 million. The short interest in Cisco (NASDAQ: CSCO) was up 12% to 41.6 million. And shares short in Dell (NASDAQ: DELL) rose 8% to 57.9 million.

Date from NYSE and NASDAQ

Douglas A. McIntyre