U.S. stock markets plunged on Thursday, booking the heaviest losses since Dec. 1, 2008 amid fear of renewed recession.

The Dow Jones Industrial Average closed down 512 points, or 4.31%, the NASDAQ lost 5.08% to close at 2556.39 and the S&P 500 dropped 4.78% to 1200.07.

Thursday's losses wiped out all gains for calendar 2011. Since late July, the Dow has dropped 10.5%, considered by analysts a correction.

The home building sector was not spared. Shares of Hovnanian (NYSE:HOV) lost 19% to close at $1.40, dangerously close to the level at which the stock exchange routinely threatens to delist the stock.

Standard Pacific (NYSE:SPF) fell 9.09% to close at $2.50. PulteGroup(NYSE:PHM) lost 8.28% to close at $5.54; Lennar (NYSE:LEN) dropped 8.15% to $15.67. KB Home (NYSE:KBH) declined 7.87% to $7.38; D.R. Horton (NYSE:DHI) lost 6.93% to $10.48; M.D.C. (NYSE:MDC), which reported earnings early Thursday, dropped 6.40% to $19.60; Ryland Group (NYSE:RYL) lost 6.54% to close at $13.

Among other builders, Beazer Homes (NYSE:BZH) dropped 5.81% to $2.43; Meritage lost 5.76% to $20.54; M/I (NYSE:MHO) fell 5.09% to 10.06; and Toll Brothers (NYSE:TOL) dropped 5.83% to close at $18.08. (NYSE:NVR) dropped 4.32% to $621.48; Avatar (NASDAQ:AVTR) fell 2.8% to close at $13.90.