European and U.S. stock markets fell Tuesday after government figures showed the U.S. economy did not grow as fast in the third quarter as previously estimated, stoking fears that the recovery in the world's largest economy will be slow.

In its second estimate for growth in the three months through September, the Commerce Department said U.S. gross domestic product was up by an annualized rate of 2.8 percent, down from the 3.5 percent previously published.

Following the data's release, the FTSE 100 index of leading British shares closed down 31.54 points, or 0.6 percent, at 5,323.96 while Germany's DAX fell 32.17 points, or 0.6 percent, to 5,769.31. The CAC-40 in France was down 28.55 points, or 0.8 percent, at 3,784.62.

On Wall Street, the Dow Jones industrial average was down 55.33 points, or 0.5 percent, at 10,395.62 around midday New York time while the broader Standard & Poor's 500 index fell 4.44 points, or 0.4 percent, at 1,101.80.

Though a downward revision was expected, given lackluster trade and retail sales data, it did stoke fears that stock valuations following an eight-month rally may not be entirely merited.

"Today's revision acts to confirm the view that the recovery will be both sluggish and fragile in the near to medium term," said Arek Ohanissian, economist at the Centre for Economic and Business Research.

"We expect to see further setbacks as well, including a slowdown in the growth rate in the first half of 2010 after the initial bounce from the inventory cycle and the end of important incentive schemes such as the 'cash for clunkers' programme," Ohanissian added.

The GDP figures dominated the mood in the markets even after better than expected consumer confidence figures from the Conference Board _ its main index rose to 49.5 in November from October's 48.7 _ and a fifth straight increase in S&P Case Shiller's house price index.

"U.S. markets were in no mood ahead of the Thanksgiving Holiday weekend to note any positive factors," said Howard Wheeldon, senior strategist at BGC Partners.

Tuesday's stock losses were not entirely unexpected following Monday's big advance, when stronger U.S. housing data yielded some optimism about the economic recovery.

European markets have been partly cushioned from the fallout of big declines earlier in Asia amid further signs that the European economic recovery is gathering pace.

Germany's Ifo Institute said business confidence rose for an eighth consecutive month in November to its highest level since August 2008, while the EU's statistics office Eurostat reported that industrial orders in the 16 countries that use the euro rose by 1.5 percent in October, double market expectations.