By Joanne Frearson

LONDON, Nov 24 (Reuters) - European shares closed lower on Tuesday after data showed the U.S. economy grew at a slower rate than forecast in the third quarter and home prices in the United States rose less than expected in September.

The pan-European FTSEurofirst 300 index of top shares closed 0.7 percent lower at 1,016.66 points after rising to a high of 1,025.17 earlier in the session.

The index has gained 57 percent since falling to a record low in early March and is up 22 percent for the year.

"There has been some mixed economic data and the market has taken a more pessimistic view on it. Wall Street is going down with Europe in pursuit," said Philippe Gijsels, strategist at Fortis Bank.

"The market has been a little bit volatile but that is also probably because volumes are quite low. The U.S. is about to go into its Thanksgiving holiday weekend, so there are big swings in the market and that is what you are typically seeing today."

The U.S. economy grew at a slower pace than forecast in the third quarter, while Standard & Poor's/Case-Shiller indexes showed home prices rose less than expected in September.

But, U.S. consumer confidence edged higher in November after an unexpected drop in October, with fewer consumers expressing doubt about a worsening jobs market, according to a report.

Banks featured among the biggest losers. HSBC, BNP Paribas, Societe Generale, UBS and Credit Suisse were down 1.9 to 3.2 percent.

LLOYDS GAINS

But Britain's Lloyds Banking Group gained 2.6 percent after it priced its record 13.5 billion pounds ($22.3 billion) rights issue at 37p per share, a smaller-than-expected discount, as it taps its shareholders for cash to avoid costly state support.

Energy stocks were under pressure as crude slipped to $76 a barrel. BG Group, BP, Royal Dutch Shell and Total were down 0.3 to 0.5 percent.

Mining stocks retreated as metal prices slipped. Copper was down 0.7 percent and nickel fell 0.7 percent.

Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata were 0.4 to 2.9 lower.

"The market is nervous and lacks conviction so it tries to take its clue from the data releases," said Klaus Wiener, head of research at Generali Investments.

"And that will be the blueprint for the next couple of weeks -- that we have good days followed by weaker days. To get out of this we need more convincing evidence on one or the other side," he added.

On the upside, investors favoured the safety of defensive stocks. Drugmakers were in demand, with Novartis and Roche up 0.8 percent and 0.7 percent, respectively.
Across Europe, the FTSE 100 index and Germany's DAX were both down 0.6 percent and France's CAC 40

was up 0.8 percent. (Additional reporting by Atul Prakash; Editing by Erica Billingham) Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2 (joanne.frearson@thomsonreuters.com; +44 207 542 2773, Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.