Nasdaq short interest rises in late February

NEW YORK (Reuters) - Short interest on the Nasdaq rose 2.2 percent in late February, the exchange said on Tuesday, suggesting an increase in bearish sentiment in the stock market.

As of February 29, short interest rose to about 9.25 billion shares, compared with 9.05 billion shares as of February 15.

The Nasdaq's short ratio, or the average number of days it would take to cover the outstanding short positions, increased to 4.17 days from 3.53 days in mid-February.

"The market has been weighed down by the record level of short selling that has been pouring into stocks at an alarming rate. The shorts have made a lot of money this year and their confidence in further downside seems very clear," Dylan Wetherill, president and founder of ShortSqueeze.com, a Web site that tracks short interest, wrote in an e-mail.

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 Caroline Valetkevitch; Editing by Leslie Adler)