(For a Reuters live blog on U.S., UK and European stock
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    * Wells Fargo, Citigroup among biggest drags on S&P 500
    * Exxon Mobil weighs on S&P, energy sector on regulatory
probe 
    * Retail sales fall again in December
    * Dow down 0.34%, S&P 500 down 0.48%, Nasdaq down 0.40%

 (Updates prices, adds comments, adds NEW YORK dateline, changes
byline)
    By Echo Wang
    New York Jan 15 (Reuters) - Wall Street's main indexes
dropped on Friday, with the biggest drag coming from big U.S.
banks after their earnings reports while the energy sector was
also weighed down by a regulatory probe into Exxon Mobil Corp
 XOM.N .
    The S&P 500 banks index  .SPXBK  was down 2.8% as shares of
Wells Fargo & Co  WFC.N , JPMorgan Chase & Co  JPM.N  and
Citigroup Inc  C.N  tumbled even though they had posted
better-than-expected fourth-quarter profits. The bank sector had
rallied sharply in recent days.  urn:newsml:reuters.com:*:nL4N2JQ2PN
    Wells Fargo, down 7%, was the biggest drag on the S&P 500
followed by Exxon Mobil  XOM.N , down 4%.
     Wall Street's main indexes were set to end the week lower
after climbing to record highs recently on bets of a hefty
fiscal stimulus package and optimism about vaccine distribution.
    "Financials and energy has been disappointing ... that's
bringing down the whole market," said Chris Zaccarelli, Chief
Investment Officer at Independent Advisor Alliance in Charlotte,
NC. 
    "This year is the year for financials, energy, materials,
industrials. So if there is a day when they're not leading, it's
not good news for the market."
    Also on investors' minds was incoming U.S. President Joe
Biden's stimulus proposal, unveiled on Thursday. 
    The $1.9 trillion proposal included some $1 trillion in
direct relief to households.  urn:newsml:reuters.com:*:nL1N2JP30B 
    Four of the 11 major S&P were gaining ground, with real
estate  .SPLRCR  as the biggest percentage gainer with a 1%
gain, while energy  .SPNY  fell 3.2%, posting the deepest
decline.
    By 2:20 p.m. ET (1920 GMT), the Dow Jones Industrial Average
 .DJI  fell 104.42 points, or 0.34%, to 30,887.1, the S&P 500
 .SPX  lost 18.1 points, or 0.48%, to 3,777.44 and the Nasdaq
Composite  .IXIC  dropped 52.33 points, or 0.4%, to 13,060.30.
    Earnings for S&P 500 companies are expected to decline 9.5%
in the final quarter of 2020 from a year ago, but are expected
to rebound in 2021, with a gain of 16.4% projected for the first
quarter, according to IBES data from Refinitiv. urn:newsml:reuters.com:*:nL1N2JO21D
    Exxon shares fell after a report said that the U.S.
Securities and Exchange Commission launched an investigation of
the oil major, following a whistleblower's complaint that the
company overvalued a key asset in the prolific Permian shale oil
basin.  urn:newsml:reuters.com:*:nL4N2JQ2ZM
    Spotify Technology SA  SPOT.N  dropped about 5.9% after
Citigroup downgraded its shares to "sell".
    Hewlett Packard Enterprise Co  HPE.N  rose 0.9% after J.P.
Morgan upgraded the enterprise software maker's stock to
"overweight."
    Declining issues outnumbered advancing ones on the NYSE by a
2.05-to-1 ratio; on Nasdaq, a 2.04-to-1 ratio favored decliners.
    The S&P 500 posted eight new 52-week highs and no new lows;
the Nasdaq Composite recorded 158 new highs and five new lows. 

 (Additional Reporting by Devik Jain and Medha Singh in
Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel)
 ((E.wang@thomsonreuters.com))