UPDATE 1-Moody's raises debt ratings on Ford, Ford Credit

(Adds details, Fitch action)

NEW YORK, Nov 2 (Reuters) - Moody's Investors Service on Monday raised its ratings on Ford Motor Co (F.N) and its finance arm, citing the automaker's progress in cutting costs and boosting market share.

Moody's was the second rating agency to take positive action on Ford's rating after the automaker earlier on Monday surprised Wall Street by posting a quarterly profit. Fitch Ratings revised its outlook on Ford and Ford Credit to positive from stable, signaling an upgrade to their rating is more likely.

Moody's raised its ratings on Ford and Ford Motor Credit by one notch to B3, the sixth-highest junk rating, from Caa1. The agency said it may raise Ford Credit's rating again.

Fitch rates Ford and Ford Credit CCC, its seventh-highest junk rating.

Ford reported its first quarterly operating profit in its key home market of North America since 2005 and raised its 2011 outlook to "solidly profitable" from break-even. For details click on [ID:nN02411585].

"The evidence we see indicates that Ford is on track in its plans to reestablish a sustainable and competitive business model," Moody's analyst Bruce Clark said in a statement.

Fitch said in a statement that Ford is riding "a wave of consumer goodwill resulting from its ability to avoid a direct government rescue and from favorable quality reports."

Production cuts at General Motors and Chrysler indicate that several points of U.S. market share may be up for grabs over the next several years, and Ford is in a good position to capture part of it, Fitch said. (Reporting by Dena Aubin; Editing by James Dalgleish)