* Brazil falls most since Nov 2009
* Fears of slowing U.S. growth could drive stocks lower
* Brazil's Bovespa off 5.7 pct, Mexico's IPC off 3.4 pct (Updates to close)
By Michael O'Boyle and Alexandra Ulmer
MEXICO CITY/SANTIAGO, Aug 4 (Reuters) - Latin American stocks tumbled on Thursday as a snowballing global sell-off knocked Brazil's market down by the most since the 2008 financial crisis and Mexico fell by the most in more than two years.
The MSCI Latin America stock index .MILA00000PUS sank 5.1 percent, bringing its loss this week to more than 10 percent. It was the worst four-day loss since Europe's debt crisis exploded last May.
Bets that U.S. growth is flagging, a bruising fight over the budget in the United States and fears that the euro zone crisis is widening to Italy and Spain sparked panicked selling of stocks and other riskier assets.
"Some people became completely hopeless, others just wanted to curl up and die. This was just awful," said Gerardo Roman, head of trading at brokerage Actinver.
The U.S. government releases July's payrolls report on Friday, and the closely watched gauge of the U.S. economy could reinforce fears that the United States is heading toward another recession and deepen losses.
A surprisingly good number could spur at least a temporary rebound, analysts said.
Brazil's benchmark Bovespa stock index .BVSP fell 5.72 percent to close at its lowest since July 2009.
"I don't think we've hit the bottom yet, though it's hard to see where that could be," said Jose Simao Junior, a partner and director with Intrader in Sao Paulo. "The market is living through a moment of total irrationality and risk aversion."
Heavyweight commodities companies sank in Sao Paulo. Mining giant Vale (VALE3.SA), the world's biggest producer of iron ore, gave up 5.77 percent. State-controlled energy company Petrobras (PETR4.SA) declined 7.36 percent.
Mexican stocks IPC stock index .MXX shed 3.37 percent to close at its lowest since late September 2010. The index has now erased about 70 percent of its rally that started in late August last year and took the IPC to a record high in January.
That rally started after the head of the U.S. Federal Reserve, Ben Bernanke, signaled the Fed would buy $600 billion in U.S. bonds, which analysts say pushed investors to drive up stock prices. It may have also papered over the weak growth outlook in the United States, traders said.
"Welcome to reality," Actinver's Roman said. "We have now left the virtual world of Mr. Bernanke."
Billionaire Carlos Slim's America Movil (AMXL.MX), one of the biggest telecommunications firms in the world, lost 2.43 percent while miner Grupo Mexico (GMEXICOB.MX) dropped 3.63 percent.
Chile's IPSA index .IPSA sank 3.94 percent to close at its lowest since July 2010.
"Uncertainty had been accumulating and ended up panicking the market," said Renato Gennari, head of equities for BICE Inversiones in Santiago. "Volatility is going to continue. August is going to be volatile, just like July was."
Retailers were among the stocks leading losses, with Falabella FAL.SN down 3.96 percent and Cencosud CEN.SN off 5.68 percent. (Additional reporting by Luciana Lopez and Silvio Cascione in Sao Paulo; Editing by Dan Grebler)