Short sellers have increased their activity in Wal-Mart Stores inc. (NYSE: WMT) and in Target Corp. (NYSE: TGT), although it seems that Wal-Mart is looking less targeted, compared to the prior short sale reports.

At the end of May, its short interest was 51,073,300 shares versus 49,535,900 in the reading before.

Elsewhere, short sellers also raised their efforts against Target, as its new short reading is 49,754,100 shares versus 44,418,500.

So it seems that the 3.1% increase in Wal-Mart short selling versus the 12% gain in short selling at Target puts the recession-winner in the lead again as far as which company is the place to hide out in during a recession.

Wal-Mart has definitely been the beneficiary of the "trading down" environment in consumers right now and shares are only about 1% under their 52-week highs.

It is always interesting to see the changes in short interest, particularly when you are right in the middle of earnings season. It seems the short sellers have gotten a little less confident on the "digital four" of the NASDAQ. In fact, the only one of the four that saw an increase was only a tiny increase.

As you will see below, the major components of the NASDAQ top digital companies saw real short covering ahead of earnings. Keeping conviction against stocks is frequent, but the lessons of eternal pessimism have historically shown to not be a winning strategy.

Microsoft Corp. (NASDAQ: MSFT)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 109,056,265 (7.88%) 48,450,376 2.25
03/31/2008 118,383,897 (3.82%) 57,762,166 2.05

Google Inc. (NASDAQ: GOOG)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 4,905,775 (5.84%) 5,368,787 1.00
03/31/2008 5,210,156 7.07% 6,382,427 1.00

Yahoo! Inc. (NASDAQ: YHOO)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 36,104,797 (12.54%) 22,789,737 1.58
03/31/2008 41,280,401 (17.13%) 25,874,919 1.60

Oracle Corp. (NASDAQ: ORCL)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 42,655,256 2.94% 34,868,017 1.22
03/31/2008 41,436,043 6.57% 51,966,613 1.00

As Oracle's earnings are still a ways out, the need for traders to cover there probably wasn't as critical as it was otherwise.

Jon Ogg is an editor and producer of the "10 Stocks Under $10" weekly newsletter for 247WallSt.com.

Cable stocks have fallen sharply and most trade near 52-week lows, but that is not keeping short sellers from continuing to believe that they could go lower. The short interest in Comcast (NASDAQ: CMCSA) and Charter (NASDAQ: CHTR) went up on December 14 compared to November 30 according to data from Nasdaq.

The slide in cable shares began around mid-year, when comments from Comcast indicated that the new TV-over-fiber products from telecom companies like Verizon (NYSE: VZ) were starting to take cable customers. Up until recently, cable was able to market voice, TV,and broadband as one package into the home. The telephone companies could not match that. But fiber installations have changed the picture, and competition is fierce.

Cable companies are starting to see slowing growth in their subscriber bases. That could push them to drop rates, and it is forcing them into capital expenditures to improve the speed of their own networks. Both moves put pressure on earnings.

A look at the Nasdaq short interest on December 14, compared to November 30, shows that bets against discount brokers rose sharply. Short interest in E*Trade (NASDAQ: ETFC): moved up 3.9 million shares to 53.7 million, according to data from the exchange. That might have been expected, given the financial company's problems with mortgage related securities.

But, shares short in TD Ameritrade (NASDAQ: AMTD) jumped 8.2 million shares to 17.8 million, and short interest in Schwab (NASDAQ: SCHW) moved up by 6.1 million shares to 28.7 million. Both figures are a fairly large percentage increase.

The simple explanation for the rise may be that both stocks have done better than financial shares as a whole and are ready for a pull-back. Schwab's stock is up over 30% this year. Ameritrade is up just under 25%.

But there are two other possible explanations, both a bit more unsettling. One is that a bear market would likely hurt earnings at discount brokers. A recession early next year could cause individual investors to pull in their horns. The other theory is that the two firms could have balance sheet problems of their own. This is less likely, since neither company has made any disclosures to that effect.

Whatever the reason, a fairly large amount of money is being gambled that the discount brokerage stocks have peaked.

Douglas A. McIntyre is an editor at 247wallst.com.

While many financial stocks experienced turmoil recently, it appears that NYSE short selling has been mixed and in some key stocks the short sellers drastically trimmed their positions. These changes were from the November 30 reading to the new date of December 14. The raw number of more active financial stocks saw an increase in short selling, as you can see below:

STOCK (Ticker)	DEC 14, 2007	NOV 30, 2007
Countrywide Financial (NYSE: CFC)	139,211,619	131,258,613
Citigroup Inc. (NYSE: C) - (2008 Dogs of the Dow stock)	104,873,159	84,849,090
Wells Fargo (NYSE: WFC)	67,128,867	64,840,618
Wachovia (NYSE: WB)	46,359,867	45,420,765
MBIA Inc (NYSE: MBI)	39,207,847	30,185,705
Lehman Brothers (NYSE: LEH)	37,061,479	34,055,324
JPMorgan Chase (NYSE: JPM)	30,936,347	33,187,514
Ambac Financial (NYSE: ABK)	30,120,143	24,029,144
Merrill Lynch (NYSE: MER)	28,948,649	25,080,570

A lot of traders believe that financial shares have further to fall. A look at the NYSE short interest in companies listed on the exchange show very large increases in the shares sold short in Fannie Mae (NYSE: FNM), Countrywide Financial (NYSE: CFC), Washington Mutual (NYSE: WM), and several other banks.

The comparisons for short interest are based on numbers as of November 30 versus November 15.

Investors are still skeptical about Fannie Mae. Shares short in the company moved up 26.6 million to 50.6 million. Such a large percentage increase is unusual, but with the company cutting its dividend and raising money, all of the bad news may not be out.

Countrywide's short interest is now 138.3 million shares, second among all NYSE stocks after Ford (NYSE: F). The CFC short interest moved up 18.8 million shares. Traders are still willing to bet that the company's fourth quarter could be weaker than expected.

Even money center banks are not immune to investors who are looking for more share sell-offs. Short interest in Wells Fargo (NYSE: WFC) has now risen to 64.8 million shares, up 11.2 million shares in two weeks.

Douglas A. McIntyre is an editor at 247wallst.com.

The short interest in Yahoo! (NASDAQ: YHOO) fell by 11.8 million shares to 54.3 million between October 31 and November 15, according to figures from the Nasdaq. The stock has never really recovered from poor earnings late last year and the perception that Google (NASDAQ: GOOG) will suck up a huge share of internet ad dollars. Yahoo!'s stock was over $43 in early 2006, but now trades at only $25.59.

To some extent, believing that Yahoo!'s shares will rise is believing that all internet advertising will continue to rise quickly. Yahoo!'s quarterly numbers show that its revenue is actually not growing as fast as online advertising in general, a rate that is put at about 20% year-over-year. But the company has moved to make acquisitions that will allow it to target display advertising better, and its Panama search ad platform has received at least modest reviews from customers.

The problem with gambling that Yahoo! can do better is that its performance does lag online revenue in general, and there is a perception that a recession could slow the flow of all internet dollars. Yahoo!'s modest growth rate might get worse. And its share of the U.S. search market is not really improving. Yahoo! sits at about 20%, while Google's monthly numbers run closer to 60%.

The market was also excited about Yahoo!'s big stake in China e-commerce company Alibaba. The firm went public last month, and, at one point, the U.S. company's piece of the IPO was worth over $5 billion. But Wall Street figured out that selling such a large stake was impossible. And Alibaba's shares did drop.

Yahoo! may not be going up and some shorts may get burned.

Douglas A. McIntyre is an editor at 247wallst.com.

It is usually an interesting read to see what is going on in overall NYSE, AMEX, and NASDAQ short selling. Today we looked over various short interest reports based upon November 15, 2007, on the NYSE, which is fresh data for U.S. traders because of the Thanksgiving holiday. The total NYSE Short Interest went up from 11.932 billion shares on October 31 up to 12.387 billion shares as of November 15. This is the second increase in a row but within recent month data.

Below is a summary of some key NYSE short interest changes:

Stock	(Ticker)	11/15/2007	10/31/2007	%Change
Corning	(NYSE: GLW)	12,678,622	16,112,839	-21.31%
EMC 	(NYSE: EMC)	50,028,872	61,281,674	-18.36%  
VMware	(NYSE: VMW)	11,681,831	10,440,110	+11.89%

There were also many key net share changes in short interest, and here are a few of the key names:

Stock		(Ticker)	11/15/2007	10/31/2007	Net Change
CVS Caremark 	(NYSE: CVS)	67,661,461	37,871,140	+29,790,321
Mirant Corp 	(NYSE: MIR)	50,241,294   	23,796,710   	+26,444,584
Qwest Comm. 	(NYSE: Q) 	66,747,528   	82,000,170   	-15,252,642
General Electric(NYSE: GE) 	61,608,091   	66,708,279   	-5,100,188

Out of financials, Countrywide Financial NYSE:CFC) led the charge with more than 112 million shares. Here are some expanded short interest notes:

• Financial and general
• Key decreases in NYSE short interest
• Key increases on NYSE short interest

A review of the short interest in stocks traded on the New York Stock Exchange shows that some investors are willing to bet that shares in big financial institutions may go ever lower.

The figures from the exchange take the short interest in companies on November 15 and compare it to the numbers from October 31.

The short interest in Countrywide Financial (NYSE: CFC) moved up 5.5 million shares to 112.5 million. It was the second most-shorted stock listed on the NYSE. In the last five trading days, the stock has moved from above $12 to below $9, so traders may have already made some money. Washington Mutual (NYSE: WM) saw a sharp increase in shares sold short, up 12.3 million to 74.6 million. Trading in the stock over the last five days has made that bet look good. And, short sellers may hold their positions for a while longer, hoping for more bad news from the sector.

Wall Street's shorts also moved into positions that assume shares in commercial banks could sell off more. Shares sold short in Wachovia (NYSE: WB) spiked almost 7 million to 37 million, and the short interest in Wells Fargo (NYSE: WFC) moved up almost 6 million to 53.7 million.

If more mortgage-related write-offs come out of the financial services industry, the gambles against stocks in the sector will pay off handsomely.

Douglas A. McIntyre is an editor at 247wallst.com.

The short interest for the NYSE is out for the second half of September. The NYSE Euronext (NYSE: NYX) actually showed a small increase in the total shares short on the NYSE: the September 28 settlement short interest was 11,878,834,897, above the 11,841,051,529 reading of September 14, 2007. This represents 3.1% of the total shares outstanding.

The raw truth is that this is actually a very small gain of only just over 37,000,000 shares. But it follows what was a large drop from mid-August to mid September as mid-August was in the midst of the market malaise with 12,466,511,521 shares listed as being short. Just at the end of last month I had noted that short selling Internet stocks showed mixed results. There had previously been a large drop in major banking stock short interest, but we also showed how housing and retail stocks had been under short selling pressure.

You can see the full list of the September 28 settlement date short stocks at the site, but here are the top 10 (with short interest):

• iShares Russel 2000 Index (NYSE: IWM) 258,152,676
• Ford Motor (NYSE: F) 177,621,324
• Qwest Communications (NYSE: Q) 84,338,020
• Advanced Micro Devices (NYSE: AMD) 76,350,102
• Countrywide Financial (NYSE: CFC) 76,100,928
• General Electric (NYSE: GE) 65,851,636
• Time Warner Inc. (NYSE: TWX) 64,874,719
• Best Buy (NYSE: BBY) 62,259,216
• Tenet Healthcare (NYSE: THC) 57,387,316
• General Motors (NYSE: GM) 56,515,532

The September short interest in General Electric (NYSE: GE) fell 7.6 million shares to 59.7 million. The move is unusual because GE now trades near a multi-year high. It should not take more than a bit of bad news to push it down.

But, after over five years of under-performing the market after Jack Welch retired, GE shares are up 20% in the last year.

What happened? GE has been slowly dumping the dogs in its portfolio of companies. It has parted company with its plastics unit. There is also a feeling that the company has disclosed any mortgage problems in its loan portfolio, and that they are modest.

More important, though, the company has been on a multi-month investor relations drive to try to convince Wall St. that the company is worthy of a better valuation. It would appear, at the very least, that the company is considered a good place to invest when the financial markets are troubled.

GE is unlikely to convince skeptics that it is not in too many businesses. Almost no one can divine why the conglomerate owns NBC Universal. But, the performance of its infrastructure and industrial businesses appear to make up for that concern.

The firm's shares still lag the S&P by a bit on a five year measurement, and perhaps not as many investors are willing to gamble that the disparity will continue.

Douglas A. McIntyre is a partner at 247wallst.com.

All the news about Yahoo! (NASDAQ: YHOO) seems bad. When comScore recently looked at results from search engines and combined them with results from other major sites like Craig's List and Wikipedia, Google's (NASDAQ: GOOG) share of the market was larger than previously believed while Yahoo!'s went down. The web portal's earnings for the second calendar quarter were mediocre and its revenue is no longer growing as fast as overall internet advertising. One point of view says that display advertising is now moving to social networks like MySpace and Facebook, which will hurt Yahoo! over time.

Yahoo! came out with a new program for targeting display advertising based on user behavior. The company has already began to use the product, dubbed SmartAds, in its travel section.

None of this, not even the firing of the company's long-time CEO, has done much for Yahoo! stock. It is now down 27% over the last six months and currently trades at $23.59 about $1 above its 52-week low. Yet, fewer short sellers are willing to invest on the basis that the shares will continue to fall. In August, shares sold short in Yahoo! fell 8.5 million to 62.3 million.

There are constantly buy-out and merger rumors around the stock, and perhaps there is some hope that the company's slow ad growth has bottomed. What is just as likely, however, is that Yahoo! has found a natural floor between $22 and $23. Even with poor quarterly announcements and a slow introduction of its Panama search platform, Yahoo!'s stock has stayed above this level since March 2004.

That means it might take a lot to push it lower.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Short interest in General Electric (NYSE: GE) rose 8.2 million shares, to 67.4 million. After all the excitement about future earnings and the stock trading over $40 for the first time in half a decade, the shares have slipped back to just above $38.

What appears to have happened is that the market is concerned that the black box known as GE Finance may have mortgage and high-yield loan problems. But GE is not saying much.

It is hard to find another explanation. NBC Universal should get good money from the upcoming Olympics. The company has won several aviation equipment deals and a large contract with Hitachi to build reactors for Entergy and GE Electric picked up $3.5 billion in building deals in the Middle East.

But GE plays the cards for its financial units very close to the vest. The operations have been money machines for years, but they have already been hit by some sub-prime problems. If the economy gets softer, questions will arise about its credit card portfolio and any high interest loans it may have purchased.

Some part of GE is always worrying investors. For now, it is financial services.

Douglas A. McIntyre is a partner at 24/7 Wall St.

One of the largest increases in short interest among NYSE traded stocks was seen in Best Buy (NYSE: BBY). Shares short rose by 22.3 million from July 13 to August 15, hitting 68.7 million. As of three days ago, shares in the retailer were down 8% for the month.

Investors are increasingly concerned about Best Buy's competition; Wal-Mart's (NYSE: WMT) consumer electronics business continues to grow, as does the success of Amazon.com (NASDAQ: AMZN) in the same business. Forbes recently wrote that Best Buy first-quarter results "missed the Street's forecasts as profits were dampened by competition that undercut margins." The demise of Circuit City (NYSE: CC) also worries Wall Street. Radio Shack's (NYSE: RSH) sales numbers were also awful in the last quarter.

Best Buy reaffirmed its annual sales and earnings targets during an analyst meeting last month, but there must be a large number of skeptics. Best Buy trades at only $44, near its 52-week low and well down from the high of $58.49.

It would appear that no one is inclined to believe Best Buy management right now and the shorts are taking advantage of that.

Douglas A. McIntyre is a partner at 24/7 Wall St.

A look at the August short interest for stocks traded on the NYSE shows that traders bet hard against big banks and mortgage companies. The short interest in CountryWide Financial (NYSE: CFC) rose 32.2 million shares to 83.6 million between July 13 and August 15. Short interest in JP Morgan Chase (NYSE: JPM) went up 11.6 million shares to 45.2 million. At Wells Fargo (NYSE: WFC), it rose 9.3 million to 63 million and at Wachovia (NYSE: WB) it went up 9.9 million to 49.9 million.

It would appear that the shorts made out on most of these investments. Mortgage lenders have been damaged; shares in Countrywide are down 35% over the last month.

At money center banks there is real concern that load for LBOs and private equity deals cannot be sold and that the banks are having to hang onto this high-yield and often risky debt.

But, for those who think all large financial services shares will fall in the current environment, the gamble is not paying off. Well Fargo, one of the stronger banks, is trading at $37.37, very near its 52-week high. JP Morgan's shares have recovered almost 6% over the last five days. Wachovia's shares are up over 6% over the same period.

CFC may have been a good way to make money predicting that the market would take financial institution shares down, but the better banks are recovering, perhaps faster than the shorts would like.

Douglas A. McIntyre is a partner at 24/7 Wall St.

More Countrywide Financial news

Peter Cohan: Is Bank of America's (BAC) purchase of Countrwide Financial (CFC) a good bet?
Georges Yared: Bank of America (BAC) makes strategic investment in Countrywide Financial (CFC)
Douglas McIntyre: Will Berkshire Hathaway (BRK) buy parts of Countrywide Financial (CFC)?
Douglas McIntyre: New lay-offs signal Countrywide (CFC) is not out of the woods
Peter Cohan: What the mortgage meltdown means to you
Eric Buscemi: George Bailey, meet Angelo Mozilo
Peter Cohan: Countrywide (CFC) meltdown continues
Michael Fowlkes: Countrywide Financial (CFC) adds to subprime panic
Peter Cohan: Could Countrywide Financial (CFC) be put down?