Morning Money Memo…

While the housing recovery is real there is still plenty of pain for homeowners who have been underwater with their mortgages since the collapse of the market six years ago. A new report out today says 10.7 million US households owe at least 25 percent more on their mortgages than their properties are worth. But Darren Blomquist, vice president at the listings firm RealtyTrac, says the findings also show that the recent rise in home prices in most markets is helping many homeowners improve their equity stake. "Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months."

Blomquist says the sharp price rise this year, especially in the West, may not last. "We're digging our way out of a hole and I think once we get out you'll see things kind of level off." Unlike the last time home prices surged in the 2000's analysts say there are few signs of an emerging bubble. "What's different here is that financing is very tight and we're not seeing homeowners get into loans I believe that they can't afford," says Blomquist.

Google's attorneys say their long-running practice of electronically scanning the contents of Gmail accounts to help sell ads is legal, and are asking a federal judge to dismiss a lawsuit that seeks to stop the practice. In court records filed in advance of a federal hearing scheduled for today in San Jose, Calif., Google argues that "all users of email must necessarily expect that their emails will be subject to automated processing." The class action lawsuit, filed in May, says Google "unlawfully opens up, reads, and acquires the content of people's private email messages" in violation of California's privacy laws and federal wiretapping statutes.

Red hot auto sales helped lift the stock market. The numbers from General Motors, Ford, Nissan, Honda, Chrysler and Toyota were all better than expected. The full-year sales pace rose above 16 million for the first time since late 2007 before the recession hit and home values plunged. Stocks closed up yesterday. The Dow Jones Industrial index gained 97 points. The percentage increase for the S&P 500 was even more impressive with a .81 percent rise. Stock futures are mixed this morning. Emerging-market stocks rose to a two-week high as Indian lenders and the rupee rallied on central bank plans to boost the financial industry.

The International Monetary Fund says it sees the dynamics of global growth shifting, with the major economies strengthening while developing countries slow. It predicts the US will be the main driver of global growth in the near term. The international lending agency released the assessment in advance of the Group of 20 summit that's beginning today in Russia

Smartwatches are today's hottest trend in tech. Samsung beat Apple to the market unveiling the "Galaxy Gear" at the IFA consumer tech conference in Berlin. The new device lets users answer calls and send messages with voice commands. The Samsung Galaxy Gear goes on sale next month. Sony has also released new tech gadgets. The QX-10 and QX-11 are lens attachments that aim to turn a smartphone's camera into a real point and shoot. The Sony attachments clip onto the front of a phone, boosting its megapixel count and zoom capability. Read ABC News full coverage of these new products.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc 212-456-5100