NEW YORK (AP) â¿¿ Shares of coal miners Patriot Coal and James River Coal traded higher Thursday, continuing a rally in the sector.
The stocks have done well this week, after struggling for most of 2012. On Wednesday, the energy market data firm Argus Media said mining costs for Australian companies have been surging. That could be good news for U.S.-based companies because Australian companies might have to cut back on production. On Tuesday, a Bloomberg News story pointed out a positive for the sector: coal use in Europe is at its highest levels since the mid-2000s because of rising imports and steep price cuts.
Coal stocks have suffered recently because more power plants are switching to using cheap natural gas to generate electricity. The stocks began to bounce back in late June, as analysts said the steep discounts and greater sales overseas might help.
Shares of Patriot Coal Corp. were especially strong, rising 42 cents, or 22.8 percent, to close at $2.26. The gain came on top of a 33.3 percent advance Tuesday. The surge does not reflect any major news for the company.Shares of James River Coal Co. added 49 cents, or 15.6 percent, to end at $3.63. That's on top of a 10 percent gain on Tuesday. James River also had no big news. Both Patriot and James River have a large number of shares shorted, or held by investors trying to make a profit by betting that the price will fall. That fact has prompted speculation that their rallies have been driven by those investors selling the stocks to cover their bets. Larger coal producer stocks rose earlier in Thursday's session, but turned slightly negative by the end of trading. Alpha Natural Resources Inc. shares gave up 5 cents to close at $9.27. Consol Energy Inc. stock declined 3 cents to $31.16, while Peabody Energy Corp. shares slid 8 cents to $26.13 and shares of Arch Coal Inc. lost 9 cents to $7.27.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV