US coal mining stocks up on bullish Arch comments

NEW YORK, April 8 (Reuters) - Shares in U.S. coal companies rose for a second consecutive day on Tuesday, led by a surge of more than 10 percent in Arch Coal Inc (ACI.N: Quote, Profile, Research) shares after the company forecast a sharp increase in earnings this year.

Arch Coal Chief Executive Officer Steve Leer said late Monday that he expects earnings per share of $2.00 to $2.50 in 2008, up sharply from $1.21 last year.

Leer told the Howard Weil Energy Conference in New Orleans that global coal supply will fall short by up to 35 million tons in 2008 and the deficit is set to grow, ensuring that prices remain strong.

Arch shares were up $4.91, or 10.2 percent, at $53.13 in afternoon trading on the New York Stock Exchange. Peabody Energy Corp (BTU.N: Quote, Profile, Research) shares were up 5.2 percent at $59.95 while Consol Energy Inc (CNX.N: Quote, Profile, Research) rose 5.8 percent to $78.90 on the New York Stock Exchange. The Dow Jones coal index .DJUSCL was 5.9 percent higher.

Massey Energy Co (MEE.N: Quote, Profile, Research) led a coal charge on Monday after saying it expects prices for metallurgical coal used in steelmaking to be significantly higher than previously forecast and it was raising spending to take advantage of the opportunity.

Massey's stock was up 20 cents at $48.37 in Tuesday afternoon trade on the New York Stock Exchange. It rose more than 6 percent Monday. (Additional reporting by Haitham Haddadin in New Orleans, editing by Mark Porter)