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Shocked by the severity of the bloodletting in global markets, the Federal Reserve is set on maintaining a "wait-and-see" approach to U.S. interest rates, top policymakers said at a high-level meeting in a remote Rocky Mountain retreat on Friday.

But while virtually ruling out a rate rise that was advocated until recently by some central bankers eager to prevent the economy from overheating, key Fed officials and several sources familiar with their thinking agreed that a rate cut remained a similarly remote option -- at least for now.

The deep economic slump in Russia and continuing turmoil in Asia have raised mounting fears of a global financial meltdown, prompting some in financial markets to call on the Fed to do its bit for restoring stability by easing monetary conditions.

But the threat of worldwide contagion has taken on such dramatic proportions that not even the Fed's most traditional inflation-hawks appear willing to put their fear of rising inflation at home ahead of growing concerns over the turmoil that has spanned the global financial marketplace.

"Given what's been going on in the markets, there is more reason than before to wait and see how things play out," St. Louis Fed President William Poole, a voting member of the rate-setting Federal Open Market Committee known for his strong anti-inflation views, told Reuters in an interview here.

Tellabs, Ciena set new merger plan

ANNAPOLIS, Md. (AP) -- Tellabs Inc. and Ciena Corp. proposed a new merger plan to try to revive a deal that fell apart a week ago when AT&T Corp. decided it was no longer interested in buying Ciena's telecommunications equipment.

Under the agreement, valued at $3.9 billion, each outstanding share of Ciena common stock will be exchanged for 0.8 share of Tellabs common stock, the companies announced Friday.

The earlier proposal called for a one-for-one stock swap and was valued at $7.1 billion.

Stockholders from both companies were supposed to vote last week, but the vote was postponed because of AT&T's announcement it was not interested in buying Ciena technology that increases the capacity of fiber-optic lines.

Shares of Tellabs tumbled Friday, falling $8.81 1/4 , or 15.2 percent to $49 on the Nasdaq Stock Market. Ciena's shares soared, gaining $4.50, or 14.6 percent, to $35.31 1/4 on the New York Stock Exchange.

BankAmerica blames Russia for loss

SAN FRANCISCO (AP) -- BankAmerica Corp. has lost $220 million in the global money markets since July 1, chiefly because of Russia's economic woes.

BankAmerica, the nation's second-largest bank holding company in terms of assets, said Friday it has still made $315 million in trading-related income so far this year despite its quarter-to-date losses.

Because of its losses in Russia, BankAmerica has cut its total exposure there from $412 million on June 30 to about $100 million as of Wednesday.

Other banks have reported substantial losses in Russia as well. BankBoston Corp., the country's 14th-largest bank, said Friday it has incurred a $30 million loss so far this quarter, $10 million of which is due to investments in Russia.

Republic New York Corp., the nation's 18th-largest bank, said Thursday that losses from investments in Russia will wipe out its third-quarter profits.

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