Caterpillar, Alcoa, and Merck lead the Dow in short interest as a percent of shares outstanding. Compared to an average short interest of 2.2% for all Dow components, bets against these three companies stand at around 8%, according to data compiled by CNBC.
The stock market's rally from its March 9 low pushed short interest lower for most companies, as a short squeeze forced many investors to buy back shares and cover their positions. Interestingly, average short interest on the Dow, has remained relatively unchanged for most of the year.
Although the Dow has climbed 41% since early March, short interest in Merck , the New Jersey-based drugmaker, jumped 6.7 percentage points since the beginning of the year to 7.9%, on 165.9M shares. Bets against Illinois-based Caterpillar , a manufacturer of construction and mining equipment, climbed 3.4 percentage points since early January to 8.0%, on 49.5M shares. While short interest has dropped about half a point for Pennsylvania-based Alcoa , a world producer of primary aluminum, wagers against the company's shares remain at 7.9%, or 76.9M shares in 2009.