U.S. stocks extended declines on Tuesday with the S&P 500 down slightly more than 1 percent, weighed down by bank stocks as investors fret over the implications of a federal financial regulation proposal.

The Dow Jones industrial average <.DJI> dropped 63.41 points, or 0.60 percent, to 10,562.42. The Standard & Poor's 500 Index <.SPX> fell 10.28 points, or 0.90 percent, to 1,126.66, after earlier falling 1.07 percent to a session low at 1,124.74. The Nasdaq Composite Index <.IXIC> lost 28.06 points, or 1.19 percent, to 2,326.17.

A final vote on the biggest overhaul of Wall Street rules since the 1930s is expected in a few days after key senators reached a compromise on the balance of power between state and federal officials.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)