NEW YORK ( TheStreet) -- Positive economic data for the U.S. housing sector and brighter signals from Europe offered markets a glimmer of hope this Tuesday. The U.S. Commerce Department released better-than-expected November housing data with builders breaking ground for nearly 685,000 homes, up 9.3% from October and 24.3% in November 2010, surpassing economists' expectations. Building permits were up 5.7% from the previous month.

At close Tuesday, the S&P 500 Index ( SPXINDEX) gained 2.98%, while the S&P 500 Home Building Sub-Industry Index ( S5HOME INDEX) edged forward by 7.01%, beating the main index. Stocks like, PulteGroup ( PHM), KB Home ( KBH) and Meritage Homes ( MTH) advanced 10.4, 10.1% and 9.2%, respectively, in a single-day trade Tuesday.

The Architecture Billings Index rose to 52 in November from 49.4 in October, according to the American Institute of Architect. The National Association of Home Builders expects sentiment to buoy for the third straight month in December.

Based on average estimates of analysts surveyed by Bloomberg, these stocks have upsides ranging from 5% to 40%. The buy recommendation and hold guidance for these stocks is 62% and 30%, respectively.

The stocks are listed in ascending order of upside potential.

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