NEW YORK, May 31 (Reuters) - Coal stocks continued to underperform the broader U.S. market on Wednesday and renewable energy stocks also fell after media reported the United States will withdraw from a global pact to fight climate change.
President Donald Trump will follow through on a campaign pledge to pull the United States out of the Paris climate accord, a source briefed on the decision told Reuters. Trump did not confirm the decision in a post on Twitter.
Solar energy shares got hit, with First Solar Inc down 2.5 percent and SunPower Corp off 2.8 percent.
Peabody Energy, the largest publicly-traded U.S. coal company, and Arch Coal each dropped 2.8 percent.
The United States is set to join Syria and Nicaragua as the world’s only non-participants in the Paris Climate Agreement.
A U.S. decision to withdraw from the accord could further alienate American allies in Europe already wary of Trump and call into question U.S. leadership and trustworthiness on one of the world’s leading issues.
Traders, so far, are not betting on a market change-of-heart.
The VanEck Vectors Coal exchange-traded fund fell 1.5 percent on Wednesday to $12.68 and is not far from a five-month low hit earlier in May.
The ETF is on track to fall 7.2 percent this month after rising in the first three months of the year as part of the so-called Trump trade.
Its renewable counterpart, the thinly-traded VanEck Vectors Solar Energy ETF, fell 1.6 percent on Wednesday, on track for a gain of about 1 percent in May.
“Regardless of what the President decides on the accord, we expect America’s solar industry to continue to thrive and create jobs, boost the economy and reduce greenhouse gas emissions,” the Solar Energy Industries Association said in a statement.
Shares of Tesla Inc, which recently acquired SolarCity, were up 1.3 percent at $339.44.
Several big coal companies had urged Trump to stay in the Paris deal in order to protect the coal industry’s interests overseas, including by ensuring continued financing for foreign coal-burning power plant projects.
Reporting by Rodrigo Campos, additional reporting by Nichola Groom, Richard Valdmanis; Editing by Nick Zieminski