ECONOMY

T-bill rates for 52-week bills fell to 5.85 percent, the lowest level in nearly four years. The bills will carry an equivalent coupon interest rate of 6.21 percent.

The home affordability index rose to 81.5 for the October-December period, up from 75.7 in the previous quarter, the National Association of Realtors said. The index means the typical buyer had 81.5 percent of the income needed to qualify to buy a typical starter home.

Railroad unions and the major railroads agreed to a 60-day extension of contract talks.

EARNINGS

Goodyear reported a 1990 loss of $38.3 million, compared with net income of $206.8 million in 1989. It said its fourth-quarter earnings were down 21 percent.

COMPANIES

Intel developed a prototype of a version of its top microprocessor that is three times as fast as its fastest chip on the market.

Star Technologies of Sterling extended its contract with GE Medical Systems for five years, a deal Star estimated at $75 million.

Centel Federal Systems of Reston introduced a software tool that could aid federal agencies in getting the best price for telecommunications services.

Northwest Airlines upped the ante in the nation's airfare wars, matching half-price fares to Great Britain and cutting its fares to other European destinations by up to 40 percent.

Texas Instruments laid off 320 employees, including 200 from the company's defense division. The company blamed the layoffs on a weak economy, the Persian Gulf War and an overall reduction in the defense industry in recent years.

Harcourt Brace Jovanovich said it doesn't have enough cash to pay quarterly preferred stock dividends next month. HBJ suspended common stock dividends in 1987 when it took on $2.9 billion of debt to repel British publisher Robert Maxwell.

Allied-Signal and Du Pont settled a lawsuit that charged Du Pont with trying to monopolize the $70 million market for a high-tech, heat-resistant plastic. Details were not released.

IBM agreed to license and market the computer networking products made by Novell, which are used to link personal computers in networks and are the most popular products of their type. Terms were not disclosed.

PEOPLE

Roger Bolton, assistant secretary of the Treasury for public affairs, will leave next month to become head of media relations for IBM.

CONTRACTS

McDonnell Douglas and General Dynamics were awarded Navy contracts for 400 cruise missiles for $253.9 million and $188.6 million, respectively. The Navy said the contracts were unrelated to the war.

Martin Marietta won a $43.8 million contract from GE to produce Navy electronic test equipment.

ODD LOTS

President Bush approved a new policy aimed at expanding private investment in space. The White House said the commercial space market should be encouraged to develop launch rockets and to market their services.