Shares in U.S. coal companies, which have been buoyed recently by positive global economic news, fell on Monday after Bank of America cut the ratings for two major coal miners.
The investment bank lowered Peabody Energy (BTU.N) to "underperform" from "buy" and lowered its stock price target to $22 from $32. It said the cuts reflected concern over cost pressures at Peabody's Australian operations.
Bank of America also lowered Walter Energy WLT.N to "neutral" and cut its share price target to $37 from $45.
Thermal coal prices have plummeted about 23 percent this year, as demand from electricity producers slumped with a mild winter and some utilities turned to cheaper natural gas.
The price of steel-making metallurgical coal has also fallen from around $225 per tonne two months ago, to around $160 per tonne now, as global demand for steel has weakened.
In afternoon trading on the New York Stock Exchange, Peabody was down 5 percent at $22.82 and Walter was 2.8 percent lower at $33.91. Alpha Natural Resources ANR.N was down 5.4 percent at $6.82, Arch Coal ACI.N lost 4.1 percent at $6.66 and Consol Energy was down 3.8 percent at $29.93.
Analyst Bill Burns of Johnson Rice & Co in New Orleans noted coal company stocks had risen recently following China's announcement of a steel-friendly infrastructure build-out and action from the U.S. Federal Reserve to stimulate the economy.
"But there is still a lack of progress in the economy and still an over-supply (of coal)," he said.
(Reporting By Steve James; Editing by Kenneth Barry)
GM says ISS advises against Greenlight share plan, board nominees
May 27 General Motors Co said on Saturday that proxy advisory firm Institutional Shareholder Services has recommended that shareholders vote against a slate of directors proposed by hedge fund Greenlight Capital and reject the hedge fund's plan to divide GM shares into two classes.
Fairfax Financial to sell 12.2 pct of Indian insurer ICICI Lombard
MUMBAI, May 27 Canada's Fairfax Financial Holdings plans to sell a 12.2 percent stake in its Indian joint venture insurer ICICI Lombard in a deal that will value the company at 203 billion rupees ($3.15 billion), the Indian company said on Saturday.