Short Interest In Nasdaq Issues Increases by 1% --- Nextel, Smurfit-Stone, Dell, Decline; Global Crossing, DoubleClick Advance
NEW YORK -- As technology stocks showed signs of recovery, with the Nasdaq Composite Index climbing back toward the 4000 level, bets on a pullback have increased.</br></br>The level of short sales not yet closed out, known as short interest, on the Nasdaq Stock Market rose 1% to 2,808,345,712 shares on June 15 from 2,780,161,105 shares in mid-May, according to Nasdaq. The figures include Nasdaq small-capitalization and large-capitalization stocks.</br></br>On the Nasdaq Small-Cap Market, which is made up of the 893 smaller-cap stocks, the number of short sales outstanding fell 16.9%. It rose 1.5% for the 3,842 larger-cap stocks on the Nasdaq National Market. The figures suggest that investors are betting large-cap stocks have a greater chance of declining than small-caps.</br></br>Short interest is often considered an indication of the level of skepticism in the market. Traders who sell securities "short" borrow shares and then sell them, betting they can profit by buying the stock back later at lower prices.</br></br>Short interest reflects the number of shares that haven't been repurchased for return to lenders. Aside from making negative bets, investors may rely on short selling for other purposes, such as a hedging strategy related to corporate mergers and acquisitions, for convertible securities and options, and for tax purposes.