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.

BP PLC said Monday that it has made an initial deposit of $3 billion into a $20 billion spill-recovery fund.

BP said it was making the deposit earlier than the originally scheduled Sept. 30 deadline to show its commitment to restoring the livelihoods of people affected by the worst offshore oil spill in history. The company said it would make an additional $2 billion deposit in the fourth quarter.

In June, BP agreed to set up the fund following a meeting between company Chairman Carl-Henric Svanberg and then-Chief Executive Tony Hayward with U.S. President Barack Obama and senior administration officials.

BP said the account would be administered by a newly established trust overseen by former U.S. District Judge John Martin and by Kent Syverud, dean of the Washington University School of Law. Citigroup Inc. will serve as corporate trustee.

"We are pleased that BP made an initial contribution and has taken an important step toward honoring its commitment to the President and the residents and business owners in the Gulf region," Associate Attorney General Tom Perrelli said in a statement. "We have made clear that the company still needs to ensure that the necessary funds will be available if something happens to the subsidiary that established the trust and we look forward to completion of an appropriate security arrangement in the near future."

Federal regulators say a company shut down a Michigan pipeline for planned maintenance hours before 911 calls about odors in the area where a massive oil spill was reported the next day.

National Transportation Safety Board officials told reporters Monday that Enbridge Inc. shut down its Calhoun County oil pipeline about 6 p.m. July 25. About three hours later, calls started coming in about gas odors in the Marshall area.

But NTSB officials say they can't link the shutdown to the pipeline rupture that dumped hundreds of thousands of gallons of oil into a Kalamazoo River tributary. It hasn't found the cause.

Federal officials say a Consumers Energy worker found oil on the ground on the morning of July 26. Enbridge says it detected the leak that day.

Domino's still has nightmares about a prank video posted on the social networking site, YouTube, that got two employees in trouble with the law and tarnished the pizza chain's reputation.

The Ann Arbor-based company became an instant Internet sensation in April 2009 after one franchise employee filmed another sticking cheese inside his nose, sneezing on the food and implying it would be delivered to customers from the store they worked at in Conover, N.C.

Both were fired, and the store closed several months later after sales dropped 50 percent. The two former employees were charged with contaminating food distributed to the public. Michael Setzer, 32, was found guilty and sentenced to 24 months of probation in March. Kristy Hammonds, 31, who was banned last fall from college, is still awaiting trial.

The YouTube episode "certainly was a wake-up call," Domino's spokesman Chris Brandon said. "Now we monitor (social media sites) every day. Someone on my team, it's their full-time job to monitor what's being said."

The episode reflects a growing problem of workers across the country, including in Metro Detroit, who like to gossip about the workplace on social networking sites like Facebook, Twitter and YouTube. This has resulted in employers increasing sanctions against employees.

This year, 21 percent of companies with 1,000 or more workers have disciplined employees for violating social networking policies, compared with 13 percent in 2008, according to a survey by Proofpoint Inc., an e-mail security company in Sunnyvale, Calif. About 9 percent have fired an employee for these violations, more than double from 4 percent two years ago.

"For every case you see in the news, it's really just the tip of the iceberg," said Keith Crosley, director of market development for Proofpoint. "There are many more investigations and breaches that you never hear about."

In at least one case, a worker got into trouble for a photo that seemed to have nothing to do with his job.