The Dow and S&P 500 closed out their worst session since late October on Thursday as U.S. President Barack Obama proposed tough restrictions on banks that would squeeze profits.

The Dow Jones industrial average <.DJI> fell 213.27 points, or 2.01 percent, to 10,389.88. The Standard & Poor's 500 Index <.SPX> lost 21.57 points, or 1.90 percent, to 1,116.47. The Nasdaq Composite Index <.IXIC> gave up 25.55 points, or 1.12 percent, at 2,265.70. (Reporting by Leah Schnurr; Editing by Kenneth Barry)