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MARKET HEADLINES
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- Chinese Stocks Surge 7% Higher on Stimulus Hopes
- Asian Markets Edge Up, China Soars 7% Higher
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- Shares of Nasdaq OMX fall as market declines
- VeriFone names new CFO to oversee corrected books
- VeriFone shares soar 35 pct on upbeat outlook
- Saks shares drop 8 percent after wider 2Q loss
- Conceptus shares fall on UBS long-term outlook
- American Express shares fall on weak economic data
- Staples falls after 2Q earnings forecast
- Hasbro shares fall on downgrade
- First Horizon National shares tumble
- KeyCorp shares fall on economic concerns
Since hitting a low in mid-July, the S&P 500 Financials Sector is up nearly 30% (see chart below of XLF [XLF
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], an ETF that tracks the financial sector). This run up is putting a lot of pressure on short sellers, who have increased their short positions significantly in the past few months.
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Despite the recent run up, data from Thomson Reuters shows that short positions for some of these banks are still nearly double what they were six month ago. Wachovia's [WB
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] short interest is over three times what it was in February.
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Over the past month, only the short interest in Merrill Lynch [MER
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] has significantly been reduced, primarily due to an increase in shares outstanding. If the shorts continue to be squeezed, you may see a further run up in the financials as they try to cover their positions. Alternatively, more bad news from the banks may provide them the relief they need.
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Data is a real-time snapshot *Data is delayed at least 15 minutes