NYSE Shorts Move Out Of Big Banks And Into Autos And Airlines: Looking For Chapter 11?

The mid-month reports on short interest in NYSE shares showed that many short sellers moved out of big financial stocks but made large bets against airlines and auto companies. With the prices in these industries already at multi-year lows, some shorts have to be betting that one or more of the big companies will fill Chapter 11.

The short interest in Citigroup (C) fell 7.6 million shares to 120.2 million. Shares short in Wachovia (WB) dropped 3.7 million to 102.8 million. The short interest in NCC (NCC) dropped 4.7 million to 59.9 million. Short interest in Wells Fargo (WFC) and Bank of America (BAC) also dropped modestly.

The home loan companies did not follow the financial stock trend. Shares short in Fannie Mae (FNM) rose 10.5 million to 73.6 million. Share short in Freddie Mac (FRE) moved up 5.7 million to 51.1 million.

Short sellers made big moves into auto and airline stocks. Shares short in Ford (F) jumped 27.3 million shares to 271.9 million. Short interest in GM (GM) rose 6.1 million shares to 95.5 million. Shares short in AMR (AMR) moved up 6.2 million to 39.5 million. The short interest in Northwest (NWA) jumped 4.5 million to 14.8 million.

Other notable movers included Time Warner Cable (TWC) where the short interest rose 9.4 million to 17.8 million and Halliburton (HAL) where share short increased 7 million to 64 million.

On the positive side shares short in Motorola (MOT) fell 12.1 million to 38.9 million. Shares short in Boston Scientific (BSX) fell 8.5 million to 37.8 million and the short interest in Pfizer (PFE) dropped 6.8 million to 55.7 million.

Data from the NYSE

Douglas A. McIntrye