ECONOMY

The Treasury said it will auction $11.5 billion in two-year notes Wednesday. The notes will mature July 31, 1992.

Money market mutual funds seven-day yields were at 7.66 percent, up from 7.65, reported the Donoghue Organization.

COMPANIES

Interco has deferred until Aug. 14 an $8.6 million interest payment due last Monday on the company's medium-term notes, according to a filing with the Securities and Exchange Commission.

Media General has been singled out for further investment by a group including investment firms controlled by New York financier Mario Gabelli. The group said it raised its stake in the Richmond-based newspaper chain's Class A shares to 18.98 percent from 17.84 percent.

Toyota has asked its suppliers to streamline the parts they sell the company to improve the fuel efficiency of its automobiles. Congress is considering a bill that will require auto manufacturers to improve gas efficiency by 40 percent within 10 years.

WSGP International, an investment firm headed by former Treasury secretary William Simon, said it has formed a partnership with the huge Japanese insurer, Tokio Marine and Fire Insurance Co., which has made a $100 million investment in WSGP.

ACQUISITIONS

General Electric Capital Corp. has acquired Burton Group Financial Services, the largest store credit card operator in Europe, for $329 million, the company said.

DeSoto Inc. will sell its domestic consumer paint business to Sherwin-Williams for $80 million. DeSoto's paint division is a major supplier to Sears.

REGULATION

The Energy Department softened its longstanding policy of keeping its nuclear weapons production technology off-limits to private industry. Secretary James D. Watkins signed two technology-transfer agreements with business consortia, launching a program designed to boost U.S. industrial competitiveness without compromising security, said a department spokesman.

Chicago's Mercantile Exchange and Board of Trade have proposed expanding their use of trading halts to curb market volatility and revising procedures on stock index futures as suggested by a panel last month.

The Securities and Exchange Commission told Congress it supports new restrictions on the mulibillion-dollar business of advising people how to invest their money, but defended its own oversight.

The Labor Department is investigating what may have been an improper early release of June employment data on July 6, after heavy selling by one floor trader two minutes before the jobs report was officially released.

EARNINGS

American Airlines's parent, AMR Corp., reported second-quarter earnings were down 27.4 percent from the same period a year ago.

American Home Products reported second-quarter earnings were up 13 percent. For the first half of 1990, profit was up 13 percent.

Ameritech reported an 11 percent increase in its second-quarter earnings.

Baltimore Bancorp said its second-quarter earnings were down 5 percent.

Bristol-Myers Squibb reported a 21 percent rise in its second-quarter earnings. For its first half, profit was up 20 percent.

Conrail reported its second-quarter earnings were down 2 percent.

First Interstate Bancorp reported its second-quarter earnings fell 8 percent.

Lotus reported a 128 percent increase in earnings in the second quarter.

The New York Times Co. reported a 35 percent drop in its second-quarter earnings.

Philip Morris reported its second-quarter earnings were up 27.2 percent.

Reebok reported second-quarter earnings were up 6 percent.

Union Pacific reported second-quarter earnings were $152 million, compared with $153 million for the same period last year.

Warner-Lambert said its profit rose 20 percent.

PEOPLE

Peter Barris has resigned as president and chief operating officer of Legent, a Vienna-based maker of IBM software. Joe Henson, chairman and chief executive, will replace him.

Philip A. Lacovara was named general counsel and secretary of Morgan Stanley Group and a managing director and member of the management committee of Morgan Stanley & Co.

Kevin McNerney was named executive vice president with responsibility for all U.S. and European operations for Systems Center, a Reston-based software developer.

John S.R. Shad resigned as chairman of Drexel Burnham Lambert, as part of a restructuring of the firm during its bankruptcy court proceedings.