Short Interest On Big Board Climbs to High --- Rise Was 4.8% at Mid-June; Chrysler and Disney Again Had Hefty Totals
NEW YORK -- Short interest on the New York Stock Exchange rose 4.8% at midJune to a record level, surpassing the billion-share mark for the second time.</br></br>Short interest on the American Stock Exchange also hit a record, up nearly 10% from the prior month.</br></br>The Big Board short interest level first passed the billion-share mark last December, when it reached 1.01 billion shares. For the recent month, the total was 1.04 billion shares.</br></br>Despite historic levels, though, short interest has become difficult to use as a true sign of investor sentiment. That's because much of it is attributable to program trading of large volumes of securities by institutional investors that involves hedging against other investment risks, rather than pure bets against individual stocks.</br></br>"I don't look at New York Stock Exchange short interest with any significance because it's so heavily influenced by institutions," said Philip Erlanger, market analyst at Fidelity Investments in Boston. "A billion is meaningless, anyway, when the whole volume of the stock market has been rising as well." Mr. Erlanger added that the high level "can only be a positive for the stock market, since there's that much more to be bought back" to cover short positions.