Home foreclosures soared to a record high sending the markets tumbling to close sharply lower with the Dow plunging 215 points to 12,040. Nasdaq plummeted 52 points to a 52-week low of 2221.

On the upside

Comtech Telecommunications (Nasdaq: CMTL) reported higher second quarter earnings that beat estimates and narrowed its 2008 revenue guidance.

Third quarter earnings for Flow International (Nasdaq: FLOW) nearly tripled to surpass expectations as sales surged.

Shares of Gold Fields (NYSE: GFI) rose after the South African government pledged to increase the output of electricity to meet the needs of mining companies.

On the downside

Analysts downgraded Zumiez (Nasdaq: ZUMZ) after the sports apparel and equipment retailer reported a disappointing 2.6% drop in same store sales.

Thornburg Mortgage (NYSE: TMA) received default notices after failing to meet a margin call from J. P. Morgan. Investors fear the mortgage lender will file for bankruptcy.

Keefe, Bruyette & Woods analyst Sameer Gokhale downgraded CIT Group (NYSE: CIT) and cut his earnings expectations for the company in anticipation of a $179 million write-off for student loan defaults.

In the broad market, declining issues outpaced advancers by a margin of nearly 8 to 1 on the NYSE and by more than 4 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks plummeted 21 points to 663.