Stocks mostly fell on Wednesday as disappointing results from Goldman Sachs and Wells Fargo deflated hopes for strong bank earnings in the last quarter.

The Nasdaq declined more than 1 percent as more disappointment on the earnings front came from Cree Inc . It pushed an index of semiconductors <.SOX> down 1.7 percent.

Goldman Sachs Group Inc's stock fell 2.8 percent to $169.83 after the Wall Street firm posted a 53 percent drop in profit as trading revenue tumbled. Shares of Wells Fargo & Co lost 1.7 percent to $31.93 after the company posted a fourth-quarter profit that missed some analysts' estimates.

With financials, I think expectations were for some better results after a fairly robust fourth quarter and start to 2011, said Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas.

Villalta said he was still bullish on financials for 2011, however, noting the sector's recent gains. Financials have been among market leaders in the recent rally, with the S&P 500 up 12.7 percent since the start of the fourth quarter.

Data from Thomson Reuters StarMine last Friday suggested most banks would missing earnings expectations, and Reuters Quantitative Analyst Mike Tarsala cited weak trading revenues among factors hampering results.

Hurting the Dow were shares of American Express Co , down 2.7 percent at $45.14. The company said restructuring charges, related to closing down some locations in its global servicing network, would reduce fourth-quarter earnings.

Shares of Cree and its rival LED lighting makers slid, a day after it reported weaker-then-expected sales, profit and current quarter outlook, hurt by lower sales in Asia.

The Dow Jones industrial average <.DJI> was up 4.05 points, or 0.03 percent, at 11,841.98. The Standard & Poor's 500 Index <.SPX> was down 7.78 points, or 0.60 percent, at 1,287.24. The Nasdaq Composite Index <.IXIC> was down 24.07 points, or 0.87 percent, at 2,741.78, after sliding to an intraday low at 2,737.91.

Cree plunged 13.8 percent to $54.09, while Rubicon Technology Inc slumped 5.8 percent to $21.17 and Veeco Instruments Inc tumbled 6.2 percent to $46.10. Shares of circuit maker Linear Technology Corp also dove 4 percent to $34.70 and semiconductor provider Marvell Technology Group fell 2.8 percent to $21.28.

Among bright spots for fourth-quarter results were earnings from Apple Inc and International Business Machines Corp , both released after Tuesday's closing bell.

Apple's profit blew past Wall Street's expectations on strong sales of iPhones, iPads and Mac computers. The stock was up 1.2 percent at $344.80 as a number of brokerages, including Goldman Sachs and Bank of America Merrill, raised their price targets on the stock.

Shares of IBM, whose results also surpassed expectations, rose 2.9 percent to $155.05.

(Reporting by Caroline Valetkevitch; Additional reporting by Alina Selyukh; Editing by Jan Paschal)