Stocks drop as investors shun risk

U.S. stocks fell 1 percent on Thursday on uncertainty about the impact of proposed restrictions expected from the Obama administration on big banks.

* President Barack Obama, after his party's election defeat for a Senate seat on Tuesday, will propose stricter limits on financial risk-taking in a move that may recall curbs on banks resulting from the 1930s Great Depression.

* The Dow Jones industrial average <.DJI> was down 168.91 points, or 1.59 percent, at 10,434.24. The Standard & Poor's 500 Index <.SPX> was down 16.06 points, or 1.41 percent, at 1,121.98. The Nasdaq Composite Index <.IXIC> was down 21.49 points, or 0.94 percent, at 2,269.76.

(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)