NYSE short interest rises 0.7 pct in late December

NEW YORK, Jan 7 (Reuters) - Short interest on the New York Stock Exchange rose 0.7 percent in late December, the exchange said on Monday, indicating an increase in bearish sentiment in the stock market.

As of Dec. 31, short interest rose to about 12.74 billion shares, compared with 12.65 billion shares as of Dec. 14.

Short interest as of Dec. 31 was equal to 3.4 percent of the total shares outstanding on the NYSE, the exchange said.

Investors who sell securities "short" profit from betting stocks will fall. Short-sellers borrow shares and then sell them, waiting for the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference. (Reporting by Cal Mankowski; Editing by Dan Grebler)