The S&P 500 index fell on Wednesday as stocks declined following President Barack Obama’s announcement of his proposal for new bank regulations.

The S&P closed at 1,116.48, down 21.56 points or 1.89 percent.

Ahead of the U.S. trading session today, fifteen companies on the S&P 500 reported earnings. All but two of them beat Wall Street expectations, according to

At the beginning of the year, the stock market moved higher on earnings. The market tumbled on January 12, partially on Alcoa earnings that missed estimates. It rose on January 14th ahead of Intel earnings that beat estimates.

This trend stopped on January 15, when JPMorgan announced earnings that beat estimates in pre-market hours but the stock market fell for the day. In the second week of 2010, macro events drove the stock market. On Tuesday, healthcare stocks lifted the market ahead of a Republican victory in the Massachusetts Senate race. On Wednesday, the market fell on news of continued Chinese monetary tightening.

Among the day’s biggest news was President Obama’s bid to further restrict banks. The proposal will limit the risk-taking ability of financial firms involved in retail banking. They would be restricted in their involvement with hedge funds, private equity funds, and proprietary trading operations.

The proposal also seeks to “prevent the further consolidation of [the] financial system”. It would do so by placing broader market share limits on how much an individual firm can obtain funding from various sources.

Amphenol, Comerica, Fifth Third Bancorp, Freeport-McMoran, Goldman Sachs, KeyCorp, Meredith, PNC, PPG Industries, Southwest Air, Union Pacific, United Health, and Xerox all beat estimates. Only Legg Mason and Precision Castparts fell below expectations.

Financial firms Goldman Sachs and PNC reported strong earnings. Goldman Sachs reported fourth quarter earnings of $8.20 per share on huge trading profits, up $2.95 quarter-on-quarter and much improved compared to the 2009 fourth quarter loss of $4.97. The earnings beat estimates by $3.00. The company had a negative cost (income) of $519 million for employee compensation, compared to a cost of $5.4 billion for the third quarter.

PNC reported earnings of $2.17 per share, a marked improvement from a loss of $0.77 a year ago. Last quarter, PNC gained $1.076 billion when it sold its stakes in Barclays Global Investors to BlackRock. Excluding this transaction, PNC earned $0.90 per share, beating estimates of $0.78. PNC saw its net interest income for the quarter rise $123 million quarter-on-quarter and 1.353 billion year-on-year. However, its provision for credit losses for the year increased was $4 billion, up $2.4 billion from last year.

Other S&P 500 firms to beat earnings by a more than 10 cents were Freeport-McMoran, the commodities giant, and PPG Industries, a leading industrial coatings company.

Although most of the S&P 500 firms who reported earnings today are trading down, there are a few notable exceptions. Xerox closed up 4.39 percent, Fifth Third Bancorp closed up 6.28 percent, and KeyCorp closed up 5.46 percent.