In the following video, Fool contributor Matt Thalman discusses a few of the reasons coal stocks have been losing value over the past two weeks.
Matt first explains how lower demand from emerging markets and, most importantly, China has affected the price of the resource and the stocks, but then how, more recently, the announcement from President Obama about how "to put an end to the limitless dumping of carbon pollution" also had an impact. Obama was referring to coal-fired power plants and how they emit enormous amounts of carbon into the atmosphere. The president would like to see tougher regulations placed on coal-burning plants and require them in the future to clean their emissions more than they already do.
This plan would in most cases cost the utility company more money to clean the plant up than it would to convert it to a natural gas burning plant or shut it down altogether and generate power through some other alternative source. If that happens, we would see further weakening in demand for coal.
Fool contributor Matt Thalman has no position in any stocks mentioned. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513.
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