Stocks fell on both sides of the border Tuesday.

Canadian stocks were led lower by Nortel Networks Corp. and banks as investors hesitated to place bets until the economy’s direction becomes clear.

The Nasdaq composite index lost 35.78 points to 1,570.17. The Standard & Poor’s 500-stock index dipped 5.69 points to 1,056.75. The Dow Jones industrial average shed 15.50 points to 9,052.44.

The Toronto Stock Exchange 300-stock index dipped 24.94 points to 6,869.30.

Banks fell on concern over lower profits and higher loan-default rates if economic growth slows further. Toronto-Dominion Bank slipped 30 cents to $38.20, and Bank of Montreal dropped 40 cents to $37.80.

Moody’s Investors Service Inc., the debt-rating company, said in a release yesterday it will keep its already negative average outlook for Canadian banks, with no plans to change its ratings for banks’ debt. Lower debt ratings would make borrowing money more expensive for banks, because a lower rating means higher interest payments are needed to attract investors.

Banks “should be able to weather a deeper recession, even though they may experience a few bad quarters,” the rating agency said.

Nortel dropped 35 cents to $8.25, making it the biggest contributor to the index’s fall. Bombardier Inc. fell 85 cents to $11.60, and Celestica Inc. dropped $2.15 to $47.25.

The Standard & Poor’s/TSE 60-stock index slipped 2.35 points to 398.44. The Canadian Venture Exchange composite index dipped 19.57 points to 2,836.54.