MARKETS

T-bill yields plunged. The Treasury Department auctioned 13-week bills at an average discount of 7.18 percent, down from 7.32 percent last week; 26-week bills sold at an average of 7.21 percent, down from 7.33 percent last week.

ECONOMY

Housing affordability improved in August. Falling prices and mortgage rates combined with rising incomes in August to improve the typical American family's ability to buy a home, but the improvement was somewhat restrained by the Persian Gulf crisis and weakness in the economy, the National Association of Realtors said.

COMPANIES

MNC Financial said it has closed a $750 million, secured 18-month revolving credit facility from a syndicate of nine banks led by Morgan Guaranty Trust of New York.

Sallie Mae, the government student loan agency, said it plans to resume its stock buyback program. Its board authorized repurchase of up to 4 million of its 97.2 million outstanding common shares.

Sony and Apple Computer are discussing a deal that would have Sony producing inexpensive personal computers for Apple, according to the Japanese newspaper Nihon Keizai Shimbun.

General Motors workers overwhelmingly ratified a three-year contract, and the United Auto Workers union said the next round of talks would shift to Ford starting today.

US Sprint is offering a new toll-free residential service.A spokeswoman said the 800 service would save customers 12 percent to 15 percent over direct-dial calls.

REGULATION

Federal regulators transferred most offices of the Phoenix-based Merabank to Bank of America, estimating the rescue of the thrift -- once Arizona's largest -- at $1 billion.

The House passed by voice vote a bill designed to bolster the SEC's enforcement powers and improve international cooperation in the enforcement of securities laws.

ACQUISITIONS

Malcolm I. Glazer, a businessman who last year bought a sizable chunk of Harley-Davidson Inc., announced that he holds an 8.6 percent stake in Tonka Corp. and may seek control of the Minnesota-based toymaker.

CONTRACTS

Textron Lycoming signed a $1 billion contract extension with the Army to build more than 2,000 turbine engines for tanks.

Bell Atlantic awarded Prudential Insurance a three-year, $500 million contract to organize, implement and administer the firm's first managed health care network for 53,000 non-management employees.

Computer Sciences Corp. said it got a five-year contract to provide the EPA with technical and operating support services. It said the total value of the contract, if all options are exercised, is $347 million.

General Dynamics got a $89.3 million contract for Air Force space launch vehicles and Army M-1 tanks, Stinger missiles and launching systems.

PEOPLE

Gannett named George N. Gill a vice president of its Metro Newspaper Group with responsibility for company-owned papers in Nashville and Des Moines. Gill will continue to be president and publisher of the Louisville Courier-Journal.

Donald Regan, former Treasury secretary, defending the deregulatory policies of the Reagan administration, told the House Banking Committee that ineffective supervision fueled the collapse of the thrift industry.