NEW YORK (AP) â¿¿ Shares of coal companies rose Wednesday after a string of earnings reports showed that global demand is stronger than many analysts anticipated.

Coal demand is tied to economic growth. In the U.S., for instance, about half of all electricity is generated using coal. When economic activity boosts demand for electricity, it increases demand and prices for coal.

Many analysts were worried that global economic turmoil centered in Europe would pinch demand for coal. Global markets had fallen sharply during the most recent quarter of the year on fears that the European financial crisis would halt economic growth just as the U.S. financial crisis of 2008 did.

But Sterne Agee analyst Michael Dudas said in a note to clients Tuesday that recent earnings reports from coal companies show that demand has been stronger than expected. That is raising hopes that coal prices will stay firm, and deliver better profits to companies like Peabody Energy Corp. that mine and sell coal.

Dudas said that inventories of coal are not piling up, which is the first sign that demand is dropping. He said monthly coal inventories have fallen for five straight months and are now 13 percent lower than 2010 levels

Shares of Peabody Energy rose $1.13, or 2.8 percent, to $41.38 in afternoon trading. Arch Coal Inc. was up 67 cents, or 3.9 percent, at $17.74. Consol Energy Inc. gained $1.48, or 3.6 percent, to $42.39. Alpha Natural Resources Inc. rose 60 cents, or 2.6 percent, to $23.74.

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