NYSE adds 7 companies to short-selling ban

Sept 26 (Reuters) - The New York Stock Exchange added seven more companies on Thursday to the list of financial institution shares that are not permitted to be shorted, ahead of Friday's market open.

NYSE had added nine firms ahead of Thursday's market opening. In the last two days the Nasdaq Stock Market has added three stocks, including Sears Holding Corp (SHLD.O), and dropped one from its list.

The list was started by the U.S. Securities and Exchange Commission as an attempt to calm the turmoil in global markets, which led to wild price swings in the stocks of major financial firms.

Over the last weekend, the SEC decided to let exchanges add to the list. There are now well over 900 companies covered by the ban.

Short-sellers borrow shares they consider overvalued and sell them. If the price drops, they repurchase the shares, return them to the lender and pocket the difference. (Reporting by Ajay Kamalakaran in Bangalore; Editing by Greg Mahlich)