NYSE short interest drops 10.3 percent in late July

NEW YORK (Reuters) - Short interest on the New York Stock Exchange fell 10.3 percent in late July, the exchange said on Tuesday, suggesting a decrease in bearish sentiment in the stock market in the wake of its recent hefty rally.

As of July 31, short interest fell to 14.03 billion shares, compared to a revised 15.64 billion shares as of July 15.

Short interest was equal to 3.7 percent of total shares outstanding.

Investors who sell securities short seek to profit from bets the stocks will fall. Short sellers borrow the shares and then sell them in the hope of buying back the share at a lower price, pocketing the difference.

(Reporting by Leah Schnurr)