S&P 500 short interest drops

Wagers against the Standard & Poor’s 500 Index declined for the first time since May as investors shorted fewer shares of financial institutions, including a 92 percent reduction in bets on American International Group Inc.

Short interest on the S&P 500 fell to 9.98 billion shares as of July 15, a decrease of 0.2 percent from two weeks earlier, according to data compiled by U.S. exchanges and Bloomberg. Financial companies saw the only decline among 10 industries, with short interest falling 7.1 percent to 3 billion shares. That’s the largest drop among 10 S&P 500 industries since April. Bets against energy companies rose 6.6 percent to 508.2 million.

The S&P 500 increased 1.5 percent from June 30 to July 15, while a group of financial companies gained 2.7 percent. U.S. stock exchanges release data on short selling, or the sale of borrowed stock with the hope of buying it back at a lower price, every two weeks. Yesterday’s report showed the first decrease in bets for a decline in the S&P 500 since May.

Short interest in AIG, the insurer bailed out by the U.S. government, fell the most of any S&P 500 company. It dropped to 21.9 million shares. The company said on July 15 that it will receive almost $1 billion by selling mortgage-backed certificates to Credit Suisse Group AG.

For Assurant Inc., the provider of health insurance and coverage of mobile homes, bearish wagers dropped 32 percent to 1.58 million shares, while they declined 31 percent to 25.1 million shares for KeyCorp, Ohio’s second-largest bank.

Shares sold short in Valero Energy Corp., the largest U.S. refiner, rose by 32 percent to 21 million shares. During the two-week period, the price of crude oil slid 12 percent to $61.54 a barrel. Bets against Baker Hughes Inc., the world’s third-largest oilfield-services provider, climbed 27 percent to 11.5 million shares.

Source: Bloomberg