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Goldman, long known for generous payouts to employees, also said compensation would be down in 2010 from the prior year, but the decline is smaller than the drop in the bank's revenue.

Fourth-quarter profit roughly matched analyst estimates, but revenue fell short. Goldman shares were down 3.1 percent to $169.32 in premarket trading, and shares of other banks also declined.

"If Goldman Sachs can't show a strong performance, then good luck to anyone else trying," said Simon Maughan, an analyst at MF Global in London.

Quarterly net income after payment of preferred stock dividends totaled $2.23 billion, or $3.79 per share, compared with $4.79 billion, or $8.20, a year earlier. Net revenue fell 10 percent to $8.64 billion.

Analysts on average expected profit of $3.76 per share on revenue of $9 billion, according to Thomson Reuters I/B/E/S.

"If you're on the wrong side of the trade for even a couple days, that can hurt you substantially, and that seems to have been true for Goldman, as it was for Citi," said Gary Townsend, co-founder of Hill-Townsend Capital in Chevy Chase, Maryland, which owns Goldman stock.

CEO SEES GROWTH SIGNS

Goldman emerged from the recent financial crisis as it went in, as one of the most powerful but controversial U.S. banks.

Much recent attention has focused on its dealings with Facebook Inc, including a decision this week to limit a private offering of stock in the Internet social network company to non-U.S. investors.

Nonetheless, Goldman shares have held up far better than those of many rivals. Its shares closed Tuesday above where they were when the financial crisis exploded in September 2008.

Goldman's fourth-quarter net revenue in fixed income, currency and commodities slid 39 percent from the third quarter to $1.64 billion, reflecting what the bank called "generally low client activity levels."

Bond markets were unsettled during the quarter by uncertainty over European sovereign debt and the impact of the Federal Reserve's treasury-buying program.

Investment banking net revenue fell 10 percent in the quarter from what Goldman called a "strong" year-earlier quarter, though it increased 30 percent from the third quarter.

"Trading for their own account and investment banking are a big piece of what they do," said Malcolm Polley, chief investment officer at Stewart Capital Advisors.

Both San Francisco-based Wells Fargo & Co (WFC.N), the fourth-largest U.S. bank, and Minneapolis-based US Bancorp (USB.N) also both saw higher revenues contribute to healthy net income.

Compared with some of their chief rivals, both banks are showing more signs of recovering from the nearly 3-year-old financial crisis and recession.

US Bancorp posted a 61 percent jump in net income as the regional bank released $25 million in loan loss reserves. The move was the first by the company since the financial crisis began in 2008.

The bank's earnings per share of 49 cents beat analysts' estimates by 3 cents, according to Thomson Reuters I/B/E/S.

Wells Fargo posted a 21 percent increase in fourth-quarter profit, helped by double-digit revenue growth in multiple business units.

The bank said earnings rose to $3.4 billion, or 61 cents a share, meeting analysts' expectations.

Wells Fargo shares were down 1 percent at $32.15 in premarket trading, and U.S. Bancorp was down 1 cent at $27.30 as weak results from Goldman Sachs Group Inc (GS.N) pressured financial stocks overall.

(Reporting by Joe Rauch; Editing by Lisa Von Ahn)

* Strong earnings from the likes of Apple (AAPL.O) and IBM (IBM.N) have reinforced hopes of a strong corporate earnings season.

* Apple landed blockbuster results after markets closed on Tuesday and gave a strong outlook on dazzling sales of the iPhone and iPad, sending its shares up as much as 4 percent before paring gains.

* International Business Machines Corp's (IBM) quarterly profit blew past Wall Street estimates, and a long-hoped-for recovery in its services business raised optimism that global companies were confident enough to spend more on technology. IBM shares rose 2.7 percent in after-hours trading.

* A number of banks are scheduled to release results on Wednesday, including Goldman Sachs (GS.N) which analysts expect to report a fall in quarterly profit by roughly half due to the same adverse fixed income trading environment that hurt Citigroup's (C.N) results a day earlier.

* Goldman is likely to post earnings of about $3.76 per share, according to Thomson Reuters I/B/E/S.

* State Street (STT.N), U.S. Bancorp (USB.N), Bank of New York Mellon (FIBK.O) and Wells Fargo (WFC.N) are also set to report numbers on Wednesday, along with technology firm eBay (EBAY.O).

* U.S. stocks gained on Tuesday as investors focused on increased price targets for Google (GOOG.O), which reports later this week, and Dow component Caterpillar (CAT.N), whose results are due next week.

* Optimism about earnings has helped bolster stocks in recent weeks, with the S&P 500 .SPX posting its seventh straight week of gains on Friday.

* In company news, agribusiness giant Cargill Inc CARG.UL plans to spin off its $24 billion majority stake in Mosaic Co (MOS.N), a move that could eventually lead to a takeover of Mosaic, the world's second-largest fertilizer producer.

* Citigroup Inc (C.N) plans to name John Havens as president and chief operating officer as part of a structural overhaul to address the bank's efforts to expand, the Wall Street Journal said.

* Executives from General Electric (GE.N), Microsoft Corp. (MSFT.O), Goldman Sachs (GS.N), Coca-Cola KO.N., Boeing (BA.N), Intel Corp (INTC.O) and Carlyle Group CYL.UL will be among U.S. business leaders at a meeting on Wednesday hosted by U.S. President Barack Obama and Chinese President Hu Jintao, a White House official said.

* U.S. aircraft and defense firm Boeing (BA.N) is in talks with South Korea's Korean Air Lines (003490.KS), one of its 787 Dreamliner customers, on its delivery schedule, the head of its Korea unit said.

* On the economic front, weekly U.S. mortgage applications and chain store sales are expected at 6 a.m. EST and 6:45 a.m. EST respectively, while U.S. housing starts for December are due at 1330 GMT.

* In Europe, the pan-European FTSEurofirst 300 .FTEU3 index of top shares slipped 0.2 percent in early trade, pressured by weak banks.

(Reporting by Harpreet Bhal. Editing by Jane Merriman)

The annual survey by the American Chamber of Commerce in Shanghai, which bills itself as the "voice of American business" in China, comes as Chinese President Hu Jintao began a state visit to the United States.

China drew a record $105.7 billion in foreign direct investment last year, with inflows rising more than 17 percent from the previous year as global firms piled into the country to tap its vast and growing market.

An increasing number of U.S. companies in China expect higher revenue in 2011, but nearly two-thirds of the respondents in the survey said the regulatory environment had either remained stable or deteriorated over the past year.

Some 71 percent of respondents said that enforcement of intellectual property rights had stayed the same or deteriorated in 2010, up from 61 percent in 2009 and 64 percent in 2008.

"U.S. companies are concerned about the risk of rising protectionism and inadequate enforcement of intellectual property rights (IPR)," the survey said.

"IPR remains a top concern because U.S. companies perceive a lack of IPR protection and enforcement to be a blow to their competitive advantage and is costing U.S. companies billions of dollars in lost revenue each year."

China has arrested more than 4,000 people for violating intellectual property rights since November and will enforce tougher punishments to combat the "rampant" problem, a senior government official said last week.

U.S. and European corporations say recent crack downs have had little effect, with complaints about fake brand-name goods being overtaken by claims of Chinese firms assimilating more patent-heavy foreign technology.

High-speed trains, auto designs, mobile phones and wind turbines have all been the subject of vitriol about whether Chinese firms have stolen foreign companies' patents or whether the Chinese government has excluded foreigncompetitors by demanding that they hand over valuable patentsand designs.

The International Intellectual Property Alliance, which represents U.S. copyright industry groups, has estimated U.S. trade losses in China due to piracy at $3.5 billion in 2009.

HIGHER REVENUE

The Board of governors of the American Chamber of Commerce in Shanghai includes top company officials from the Chinese operations of Citibank, FedEx, Goodyear Tire & Rubber, APCO Worldwide, Corning and General Motors.

The American Chamber of Commerce survey was conducted from mid-November to early December 2010 and a total of 346 companies participated, with a 25 percent response rate.

The report said 71 percent of respondents expected their 2011 revenue to increase by at least 10 percent, up from 60 percent in a similar survey last year.