Arch Coal Shares Fall After Goldman Downgrade
By The Associated Press
Arch Coal Inc. shares sank Friday after two Goldman Sachs analysts downgraded their rating on the coal company.
THE SPARK: Neil Mehta and Vinit Joshi lowered their rating on Arch Coal to "Sell" from "Neutral" due to high debt levels, potential coal plant retirements and coal that remain below historical averages. They also dropped their price target to $3 from $4.
THE BIG PICTURE: Arch Coal, based in St. Louis, sells coal used for power and steel production from mines in the United States.Coal prices have been pressured as utilities switched to cheap natural gas. The Obama administration has also announced stiffer regulations on the power industry to combat climate change. That could put a damper on demand for coal used for power. SHARE ACTION: Shares of the company fell 27 cents, or 6 percent, to $4.26 in afternoon trading. The stock has lost 42 percent of its value this year.
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