Home builder shares plunge on stimulus letdown

NEW YORK (Reuters) - The shares of major home builders took a tumble on Thursday after last-minute changes disappointed the industry's expectations for the stimulus bill.

The bill does include a $7,500 tax credit for first-time home buyers, but the industry and its lobbyists had pushed to make twice that amount available to any buyer.

Also, the bill eliminated a potential extension of the period during which homebuilders could base tax refund claims on losses.

The Standard & Poor's homebuilding sub-industry index was down 6.6 percent on the news compared with a 2 percent decline in the broader market's Standard & Poor's 500 index.

The shares of No. 3 builder Centex Corp CTX.N led the sector down, falling 13.4 percent to $8.31, while the shares of D.R. Horton Inc (DHI.N), the biggest U.S. builder, were down 7.4 percent at $7.86 in afternoon trading on the New York Stock Exchange.

(Reporting by Helen Chernikoff; Editing by Andre Grenon)