ECONOMY

T-bill yields rose. The Treasury auctioned 13-week bills at an average discount of 7.73 percent, up from 7.69 percent last week, and 26-week bills at an average discount of 7.64 percent, up from 7.62 percent. The investment rate was 7.99 percent on the 13-week bills and 8.06 percent on the 26-week bills.

COMPANIES

MCI won a contract to be the prime long-distance carrier for public pay phones at about 6,000 Mobil service stations and received a Mobil endorsement to offer its services for pay phones at an additional 6,000 affiliated stations. Separately, MCI announced a two-year, multimillion-dollar agreement with American National Can Co. to become its primary data communications carrier.

USAir improved its on-time performance at BWI Airport to 82.6 percent in April, the Transportation Department said. The carrier with the best on-time ranking was Trans World Airlines with 90.7 percent.

Nestle reorganized several of its businesses in the United States. It said the coffee units of Nestle will be joined with Hills Bros., the ice cream and dairy businesses of Nestle and Carnation will be folded together and Stouffer Restaurant Co. will be merged with Stouffer Hotel Co.

Foxboro, a leading maker of systems that control manufacturing processes, said it is exploring an ''alliance'' with other firms that could involve the sale of the company.

REGULATION

The Air Force lifted its suspension of doing new business with Hughes Aircraft's missile unit. The prohibition stemmed from Hughes's guilty plea in March to criminal charges of illegally possessing two government documents containing Pentagon budget projections.

The Federal Reserve granted permission to Chemical Banking and Manufacturers Hanover to provide brokerage and investment-advisory services. It also gave permission to Chase Manhattan to engage in the private placement of securities.

NCNB received Fed approval to acquire Interim Eight NCNB Texas, a savings and loan association in Tyler, Tex. Interim Eight NCNB Texas was formed to take over assets and deposits at East Texas Savings and Loan.

The SEC said a Japanese couple living in New York, Jiro Yamazaki and Ikuko Sekiguchi-Yamazaki, have agreed to pay $99,703 to settle charges of insider trading in stock of the John O. Butler Co., a maker of oral hygiene products.

The Office of Thrift Supervision barred the former president and comptroller of United Savings Bank of Paterson, N.J., from withdrawing funds from the institution or its successor. The order was issued three weeks after the thrift was placed into receivership by regulators.

CONTRACTS

Martin Marietta was awarded a $145.7 million Navy contract to develop and produce advanced sonars for submarines. The work will be performed at its Aero & Naval Systems facility in Glen Burnie, Md.

McDonnell Douglas received a $65.7 million Navy contract for the development of upgraded hardware and software for the FA-18 Hornet's APG-65 radar. The company said the contract could eventually be worth $221 million. Hughes Aircraft, as major subcontractor to McDonnell Douglas, will be responsible for 80 percent of the effort.

Bechtel won a $100 million contract to help modify a launch pad at Cape Canaveral Air Force Station so it can be used to send Titan IV rockets into space. Bechtel will provide engineering, procurement and construction services to Bethesda-based Martin Marietta, the prime contractor to the Air Force.

EARNINGS

Smithfield Foods reported fourth-quarter net income of $2.8 million, compared with a loss of $73,000 in the same period of the prior year. It said annual earnings fell 28 percent.

PEOPLE

Jeff Jarvis, the managing editor of Time Warner's five-month-old Entertainment Weekly magazine, quit the publication over "creative differences" with company officials. The magazine, which was launched amid an industry-wide slump in advertising, named People magazine editor James Seymore Jr. to replace Jarvis.

ODD LOTS

The D.C. Reinvestment Alliance, a coalition of activists, announced a plan to pressure local financial institutions into making loans in all District neighborhoods. The action was prompted by a recent D.C. government report suggesting that District banks make far fewer loans in the city's economically depressed areas despite a federal mandate to make loans wherever they collect deposits.

The Port of Baltimore narrowly held on to its share of general cargo handled at North Atlantic ports last year, but it failed to keep up with national or regional growth rates, a new study says. Baltimore lost ground to rival Virginia terminals, according to the study by the Port Authority of New York and New Jersey.