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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (12862)	3/22/2001 5:58:52 PM
From: Softechie	Respond to of 37746

Short Sellers Find Bright Spot In the Gloomy Stock Market By CASSELL BRYAN-LOW Staff Reporter of THE WALL STREET JOURNAL NEW YORK -- As the stock market continues its downward trajectory, some investors are staging celebrations. Short sellers are "enjoying the market meltdown," says Harry Strunk, an investment adviser in Palm Beach, Fla., who surveys these professional naysayers on the market. Investors who sell securities "short," borrow stock and sell it, betting the stock's price will fall and that they will be able to buy back the shares later at a lower price and return them to the lender. Short-selling reached record levels on the New York Stock Exchange in the latest period through mid-March, according to statistics released Wednesday. The level of short sales not yet closed out, known as short interest, jumped 3.4% to 5,018,347,629 shares in the latest month through March 15, from a revised 4,853,953,548 shares on Feb. 15. According to an index of short-only money managers compiled by Mr. Strunk, short sellers were up 14.8% in February, on the heels of a 16% gain posted for 2000, their first positive year since 1994. "We've had a nice run," said Brian Rogers, portfolio manager at Short Alpha Management, a 100% short hedge fund in New York. "A combination of a 20-year bull run and excessive [stock] valuations," means there could be more downward pressure on the market to come, he says. (Some analysts trace the start of a long-term bull market to 1982, though the Dow Jones Industrial Average's current bull market, in danger of being declared dead, started in 1990.) See complete short interest figures from the Nasdaq Stock Market. Short sellers were relieved by the Federal Reserve's announcement Tuesday of only a half-percentage-point cut in interest rates, while investors hoping for a larger cut were disappointed, Mr. Strunk said. On the American Stock Exchange, owned by the National Association of Securities Dealers, short-interest eased 0.3% through March 15 to 215,883,623 shares from a record of 216,545,269 shares in mid-February. Figures for the NYSE and Amex reflect transactions through March. 12, allowing extra days to complete settlement. Short interest often is considered a barometer of skepticism in the market and reflects the number of shares yet to be repurchased to return to lenders. In general, the higher the short interest, the more people who are expecting a downturn. Write to Cassell Bryan-Low at cassell.bryan-low@wsj.com