Coal shares fall as Obama wins second term
(Reuters) - Shares of coal companies including Peabody Energy Corp (BTU.N) and Alpha Natural Resources Inc (ANR.N) fell in premarket trading on fears that President Barack Obama will impose more environmental regulations on the sector following his re-election Tuesday.
The Obama Administration, through the Environmental Protection Agency, had set rules limiting greenhouse gas emissions from power plants. This has forced companies to retire many of their coal-fired plants or install expensive new pollution-control equipment.
Obama's former challenger Republican Mitt Romney, however, had argued that "excessive" environmental regulation has hampered U.S. economic growth.
Analysts at Tudor Pickering Holt said with Obama's re-election, the perception for coal is likely the worst among the energy subsectors.
Shares of Peabody, Alpha Natural, Consol Energy Inc (CNX.N), Walter Energy Inc (WLT.N) and Arch Coal Inc (ACI.N) were down more than four percent before the bell on Wednesday.
"(The drop is) 100 percent related to election results," said Eric Green, senior managing partner at Penn Capital Management, which owns coal stocks.
James River Coal Co JRCC.O, however, said it was good for the sector that the uncertainty of the election was over.
"We believe that this issue caused a temporary slowdown in economic growth both in the United States and globally," Chief Executive Peter Socha said in a statement announcing the company's quarterly results. (Reporting by Krishna N. Das and Swetha Gopinath; Editing by Supriya Kurane)
- Total CEO de Margerie killed in Moscow as jet hits snow plow |
- Pistorius starts five-year term for killing Reeva Steenkamp |
- Ebola crisis turns a corner as U.S. issues new treatment protocols
- Fashion designer Oscar de la Renta dead at 82 |
- U.S. Congress examining deal between NSA official, ex-agency chief