The European operations of General Motors (MTLQQ) were thrown further into confusion Tuesday when the automaker said the sale of its Saab subsidiary in Sweden had fallen through.

The expected buyer, Koenigsegg Automotive, backed out of the deal, GM said.

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The American automaker, which is also struggling to restructure its Adam Opel unit in Europe, is "obviously very disappointed with the decision," GM CEO Fritz Henderson said in a statement.

"Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week," Henderson said.

The number of troubled banks in the U.S. rose to its highest level in 16 years, according to a report by the Federal Deposit Insurance Corp.

The FDIC said the number of problem banks rose to 552 at the end of September, from 416 at the end of June and 305 at the end of March. It's the highest number since the end of 1993, when there were 575 troubled banks.

So far this year, 124 banks have failed, the highest annual level since 1992.

"The credit adversity we have been discussing for some time remains with us, and we expect that it will be at least a couple more quarters before we see a meaningful improvement in that trend," FDIC Chairman Sheila Bair said in a statement.

Hopes for a housing recovery were dashed this morning after a report from First American CoreLogic said that nearly 10.7 million U.S. households owed more on their mortgages than the properties were worth in the third quarter.

The report says that 23% of people with mortgages, nearly one in every four, were "underwater" on their mortgages -- a phenomenon that has been occurring as home prices continue to fall. This morning, the Case-Shiller/S&P 20-city index on home prices in September said prices were down 9.4% from the same month last year.

An additional 2.3 million homeowners are within 5% of negative territory, the report said.

Updated at 1 p.m. ET

Stocks were falling today after a big rally on Monday.

A revised report on third-quarter economic growth showed that the economy grew at a 2.8% rate in the third quarter, down from an initial reading of 3.5%.

While it was the fastest pace since the third quarter of 2007, the Commerce Department's report showed that consumer spending, which makes up about two-thirds of the economy, rose at a 2.9% rate, less than the 3.2% increase economists had forecast.

"The GDP data suggest that the economy is in the early stages of a fragile, fitful and prolonged recovery," analysts at Jefferies & Co. said. "The economy clearly received a boost from the targeted stimulus programs -- Cash for Clunkers and first-time-homebuyer tax credits."

At 1 p.m. ET, the Dow Jones Industrial Average ($INDU) was down 54 points to 10,397. The Nasdaq Composite Index ($COMPX) had shed 14 points to 2,162, and the Standard & Poor's 500 Index ($INX) had lost 5 points to 1,102.

With Thanksgiving just days away, turkeys are again the prime product in consumers' grocery carts -- and they're cheaper this year.

Wholesale turkey prices are 18% to 20% lower as the industry deals with a product surplus, according to Farha Aslam, food analyst with Stephens, and that is weighing on poultry producers like Cargill, Butterball, Hormel (HRL) and Sara Lee (SLE).

Overall turkey production is down about 9% from last year because of the recession, according to the National Turkey Federation. But "the reduction in production will not affect the turkey supply for this holiday season," said Sherrie Rosenblatt, spokeswoman for the National Turkey Federation.  

U.S. turkey production is forecast to rebound 2% next year.