Short sellers reduced their positions in major financial firms and their positions in major tech stocks were divided, based on data from the NYSE and Nasdaq for the period that ended February 29.
Bank earnings may have reached a low last year as proprietary trading and investment bank activity slows. JP Morgan (NYSE: JPM) CEO Jamie Dimon said the problem was temporary and soon would right itself. Short sellers must believe that early signs of a recovery of bank and financial firm earnings will appear soon. They pulled out of these stocks late last month.
The short interest in Bank of America (NYSE: BAC), one of the most widely shorted stocks, dropped 2% to 152 million shares. Short interest in Citigroup (NYSE: C) fell 25% to 37.5 million. Shares short in Wells Fargo (NYSE: WFC) dropped 15% to 29.2 million. The short interest in Morgan Stanley, its stock badly battered over the past month, fell by 15% to 15.1 million.
The short action in tech shares was more mixed. The news was good for Dell (NASDAQ: DELL), which showed a drop in short interest of 9% to 63.2 million. Shares short in Intel (NASDAQ: INTC) declined 4% to 99.5 million. Shares short in Texas Instruments (NASDAQ: TXN) fell 10% to 15.7, despite the fact that it revised its sales forecasts lower. Shares sold short in Broadcom (NASDAQ: BRCM) dropped 15% to 7.9 million.
Short sellers increased their positions in Microsoft (NASDAQ: MSFT) by 10% to 61.5 million. The world’s largest software company has had mixed reactions to the release of its mobile OS on Nokia (NYSE: NOK) smartphones. Shares short in beleaguered Research In Motion (NASDAQ: RIMM) rose 6% to 59.2 million. The short interest in Amazon.com (NASDAQ: AMZN) was up 27% to 10.9 million.
Douglas A. McIntyre