On Friday, the S&P 500 was up 0.2 percent and continued to climb on Monday by 4.5 percent. According to data compiled by Goldman Sachs Group Inc. and Bloomberg, an index of 50 U.S. companies with the highest short interest fell 7.6 percent last month, the biggest decline since 2012.
Frank James, who oversees $5.3 billion as the founder of James Investment Research Inc., said by phone last week, "Stocks have started on a bearish trend and we don't yet have signs of a bottom. Short selling will do pretty well so long as we retain a bearish trend. It's time to be careful," according to Bloomberg.
S&P 500 rebounded from its worst decline since 2012, gaining 0.3 percent last week, as sings of easing tensions in Ukraine exceeded worries over conflict in the Middle East. Data on U.S. services and factory orders sparked investors ' expectations that the Federal Reserve may increase interest rates sooner than anticipate.
Data compiled by Bloomberg showed that nearly 4 percent of American stocks had been borrowed and sold as of July 15, the most in two years. Data also showed over 170 companies in the S&P 500 have declined so far this year, compared to 48 at this time in 2013 and 125 in 2012.
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