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Wednesday, June 30, 2010

Sellers? Or Short Sellers?

Wall St tumbles to worst quarter since Lehman fall
REUTERS — 6:33 PM ET 06/30/10

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks staggered to the end of a dismal second quarter on Wednesday in another low volume session as investors found little reason to take on risk after conflicting economic data.
To make matters worse, leveraged short ETFs, widely blamed for a portion of Tuesday's losses, were also cited for the late sell-off as managers piled on bets the market will fall. Those funds shorted the market to keep up with customer demand.

But this is ultimately good for stocks because those shorts will need to be covered and that will drive prices up.

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