Afternoon Market Update (AXL, STI)

Fitch Ratings has upgraded the long-term issuer default rating of American Axle AXL from “B-” to “B” as the credit profile of the company showed an improvement. The ratings agency has maintained its outlook for the company to stable. Fitch mentioned, "The favorable changes come from American Axle's significant cost cutting efforts and higher production from General Motors since plant shutdowns occurred in mid-2009." Gold prices supplemented their losses following a strong rebound in US new home sales in the month of June. Home sales rose better than expected, after dipping to all-time lows in May. This has strengthened expectations of economic recovery. Gold futures for August delivery fell $7.30 at $1,180.60 an ounce on the Comex division of New York Mercantile Exchange (NYMEX). Shares of SunTrust Banks Inc STI moved up roughly 2.5% after analyst Richard Bove of Rochdale Securities upgraded the company from “sell” to “neutral.” The analyst upped the target price from $25 to $28 and raised his "normalized" earnings estimate from $4.50 per share to $4.60 per share. Bove mentioned, "While it may be premature to argue that SunTrust has turned around, it does seem reasonable to suggest that the company has stabilized its position and is no longer seeing constant deterioration in its business." Bove added, "Non-performing assets as I calculate them were down 3.4% in the quarter. This is the first decline in 4 years. The residential portfolio is stabilizing." Read more from Benzinga's Markets.