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Sector Snap: Coal

NEW YORK (AP) -- Shares of coal companies rose Friday after Moody's Investors Service boosted its outlook for the industry to "Stable" from "Negative," saying that it doesn't expect industry conditions to worsen over the next 12 to 18 months.

Moody's said that while business conditions for the coal industry remain weak, it expects coal-fired power plants to account for about 40 percent of U.S. power generation over the next year, up from 37 percent in 2012.

"Coal inventories had fallen to roughly 164 million short tons by July this year, so we expect modest improvements in thermal coal production and pricing next year," Anna Zubets-Anderson, a Moody's vice president and senior analyst, said in a statement.

Zubets-Anderson said sustained natural gas prices at current levels will boost demand for coal used by power plants from mid-2014 through early 2015. At the same time, prices for metallurgical coal, which is used in steelmaking, should stabilize, she said.

But she cautioned that the industry has little room left for cost cutting and that its 2013 profits will fall from 2012 levels as a result of lower prices, before flattening out next year.

Here's how shares of some coal companies were trading Friday:

— Alpha Natural Resources Inc., up 49 cents, or 9 percent, to $5.76.

— Arch Coal Inc., up 39 cents, or 9 percent, to $4.55.

— Peabody Energy Corp., up $1.50, or 9 percent, to $18.10.

— Walter Energy Inc., up 80 cents, or 7 percent, to $12.22.

— Cliffs Natural Resources Inc., up $1.88, or 9 percent, to $23.89.

— ArcelorMittal, up 72 cents, or 6 percent, to $13.65.