Coal stocks were on fire on Friday following a better than expected earnings report from Arch Coal (ACI). The stocks’ early momentum accelerated in afternoon trading, as the short-sellers appear to be racing to the exits. Coal stocks have been pounded this year, as power plants have switched to cheaper natural gas and new regulations are expected to raise costs. A mild winter didn’t help either.
Arch Coal posted a narrower-than-expected loss for the second quarter, and forecast improving U.S. demand for thermal coal
“With improving coal demand and ongoing supply rationalization, we could end the year with domestic stockpiles below 175 million tons, the level at which we entered 2012,” said CEO John Eaves, according to Reuters.
Arch shares jumped 30%.
Alpha Natural Resources (ANR) and James River Coal (JRCC) both jumped 15%. Peabody Energy (BTU) rose 5.3%.
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