Nasdaq Short Interest Fell
By 3.3% Through Mid-July
By EILEEN KINSELLA
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Short interest fell 3.3% in the latest month on the
Nasdaq Stock Market.
The total, which includes Nasdaq small-capitalization and
large-capitalization securities, fell to 1,555,127,795 shares as of July
15 from 1,608,441,073 shares in mid-June, according to the National
Association of Securities Dealers, which runs Nasdaq.
On the Nasdaq SmallCap Market, which is made up of the 1,421
smaller-cap stocks, short interest fell 1.55%. Short interest was
down 3.4% for the 4,148 larger cap stocks on the Nasdaq National
Market.
Traders who sell securities "short" borrow shares and then sell them,
betting they can profit by buying the stocks back later at lower prices.
As such, short interest is often taken as an indicator of the degree of
negative sentiment among investors in the stocks. Investors also may
rely on short selling for other purposes, including as a hedging
strategy related to corporate mergers and acquisitions, for convertible
securities and options, or for tax-related purposes. Short interest is
the number of shares that haven't been repurchased for return to
lenders.
The Nasdaq National Market's short-interest ratio fell to 2.77 from
2.91 last month. The short-interest ratio for the smaller stocks
decreased to 1 from 1.10. The ratio is the number of trading days that
would be required to close out the short positions through share
purchases and is considered a measure of trading sentiment.
The largest volume decreases in short interest were in 3Com Corp.,
down 23,189,098 shares to 15,675,671 shares; Staples Inc., down
15,784,230 shares to 17,913,479 shares; and Ascend Communications
Inc., down 9,470,043 shares to 13,153,882.
The largest volume increases were in Quantum Corp., up 8,603,999
shares to 23,273,661 shares; Sovereign Bancorp, up 2,299,701 shares
to 8,954,560 shares; and Boston Chicken Inc., up 2,139,940 shares to
20,188,715 shares.
Among the issues with the largest short-interest positions,
WorldCom Inc., was down 2,880,969 shares to 37,216,284 shares;
Tele-Communications A TCI Group fell 3,556,597 shares to
28,419,532 shares; and Intel Corp., was down 4,622,644 shares to
19,549,058 shares.
The next report on Nasdaq short interest will be published Aug. 27.
Big Board and Amex Short Interest
Separately, short interest on the New York Stock Exchange fell in the
latest month, while short interest on the American Stock Exchange
rose to a record.
Short interest on the Big Board dropped 1.4% to 3,393,265,091 shares
on July 15 from a revised 3,442,367,476 in mid-June.
On the Amex, short interest rose 0.7% to 172,419,103 shares in July
from a revised 171,235,298 in mid-June, setting the sixth consecutive
record short interest.
The level of negative sentiment measured by the Big Board's
short-interest ratio -- sometimes considered a contrarian indicator,
as short-interest shares eventually must be purchased -- fell to 6.41
from 7.34 in the previous trading period.
Wal-Mart Stores Inc. had the highest reported short interest on the
Big Board at 50,576,225 shares, followed by Kmart Corp., with
48,710,278 shares.
Average daily Big Board volume was 529,113,815 shares, up from
469,090,336 shares in the previous month. Big Board and Amex short
positions were calculated for the month including the 21 trading days
through July 10.
The New York Stock Exchange has amended the original
short-interest figure reported in May. The short-interest position for
Olympic Financial should have been 8,294,035 shares, not 1,985,037
shares. As a result, the exchange-wide short interest should have
been 3,291,240,237 shares, not 3,284,931,240 shares.
The next Big Board short-interest report will be published Aug. 22. |
