Housing stocks were trading mostly higher on Tuesday after an analyst forecast modest improvement in the housing market next year and better home orders for homebuilders.

In his report, J.P. Morgan analyst Michael Rehaut said he sees the housing market stabilizing and improving modestly next year, coming off a 2010 that has seen home sales weaken in the months following the end of federal homebuyer tax credits in April.

Rehaut notes that, while demand for homes remains highly depressed, new home construction and home sales have largely stabilized over the past four months.

"We see this recent stability as critical in terms of our outlook for only modest downside for home prices, in contrast to 2006-2008, when consistently falling demand trends played a key role in declining home prices," Rehaut wrote.

The analyst anticipates home prices will trend from flat to down about 3 percent next year -- a view that he notes is more positive than other forecasts, some of which see home prices falling another 5 percent to 10 percent in 2011.

As a result of more stable price trends, builders should see minimal land-related charges and a modest increase in profit margins, the analyst said.

He also expects more builders to generate operating earnings per share next year.

A federal judge has ruled that a class-action lawsuit can be filed against Florida over the sale of personal driver's license information to a private firm.

The lawsuit claims the state, specifically the Department of Highway Safety and Motor Vehicles, improperly sold about 30 million personal records between 2005 and 2009 to Shadowsoft Inc., an Irving, Texas-based Internet marketer.

Shadowsoft then sold the information to other firms that target consumers.

An attorney representing the drivers told the South Florida Sun-Sentinel that the sales violate a federal statute banning the disclosure of personal information from driver's licenses.

Howard Bushman says addresses, dates of birth and possibly Social Security numbers were released.

The judge in Tallahassee ruled earlier this month that affected drivers can become members of the suit.

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Hyundai Motor Co. said it is voluntarily recalling 139,500 Sonata sedans in the U.S. because of a manufacturing defect that could cause drivers to lose steering control.

The recall affects 2011 models built between Dec. 11, 2009 and Sept. 10, the National Highway Traffic Safety Administration noted on its website Sunday. Some of the cars have steering column shafts with connections that may not have been tightened enough or were improperly assembled. As a result, the steering wheel could become separated from the column or a driver could lose the ability to properly steer the car.

The U.S. government had opened an investigation into possible steering problems in the vehicle in August. Hyundai, South Korea's top automaker, has said there have been no related injuries or crashes reported.

Owners of affected vehicles can go to their dealers for inspection. Dealers also will update power steering software. Owners may also call NHTSA at 888-327-4236 for more information.

The recall comes as automakers ramp up their focus on safety and quality control in the wake of Toyota Motor Corp.'s massive global recall last year over gas pedal and floor mat problems. In February, Hyundai announced a recall of about 47,000 Sonata midsize sedans, mostly sold in South Korea, to replace front door latches following a handful of customer complaints. The company said it had discovered a mechanical problem with the latches which, in rare instances, would not close properly.

A mixed picture of U.S. banks emerged Tuesday as the industry posted its highest quarterly earnings in nearly three years while the number of troubled institutions grew by more than 50.

Banks overall made $21.6 billion in net income in the April-to-June quarter, the Federal Deposit Insurance Corp. said. It was the highest quarterly level since 2007 and was led by the largest institutions. The industry lost $4.4 billion in the second quarter of 2009.

But the number of banks on the FDIC's confidential "problem" list increased by 54 in the quarter -- growing to 829 from 775 in the first quarter. Most of the banks that have failed this year have been smaller or regional banks.

The decline in bank lending stemming from the financial crisis showed signs of leveling off, the data show. Total lending declined by $107.5 billion, or 1.4 percent from the first quarter. It posted the steepest drop since World War II -- 7.5 percent -- in 2009 from the year before.

An appeals court upheld federal government auctions of about $33 billion of wireless spectrum, saying it would be "imprudent and unfair" to undo them even though some rules governing them were invalid.

Tuesday's ruling by the U.S. Third Circuit Court of Appeals in Philadelphia allows Verizon Wireless, AT&T Inc, Deutsche Telekom AG's T-Mobile unit and others to keep billions of dollars of licenses they had won in the auctions, which took place between 2006 and 2008.

The auction process had been challenged by Council Tree Communications Inc, Bethel Native Corp and the Minority Media and Telecommunications Council, which contended that Federal Communications Commission rules for the auctions were unfair to smaller service providers.

Stocks fell Thursday after the Labor Department said claims for unemployment benefits rose unexpectedly last week, renewing concerns about the pace of the economic recovery.

The disappointing news about the jobs market came minutes after news that Intel Corp. was acquiring McAfee Inc. The deal, valued at $7.68 billion, helped to cushion the blow from the jump in unemployment benefit claims.

The Dow Jones industrial average fell 29 in early morning trading. Broader indexes also fell.

The two announcements are the latest to provide a conflicting picture of the recovery. Economic reports have regularly shown the pace of a rebound is slowing and companies are skittish about adding new workers. That has hurt stocks on some days in recent weeks. It has also stoked fears about the economy falling back into recession.

At the same time, corporate announcements, including earnings reports for the past six weeks, have largely showed companies are doing well. Mergers and acquisitions activity is often considered a positive sign because it means companies are willing to spend money to grow their businesses and are confident that prospects are improving.