USG, a Chicago-based building materials company in the midst of debt restructuring talks with lenders, defaulted on $40 million in interest payments due yesterday on $600 million of "junk" bonds.

Juvenile Sales of Beltsville said it completed a recapitalization plan with investors that increases its equity by $4.6 million and reduces debt by $3.6 million.

Mortgage rates fell this week. Rates for 30-year fixed mortgages averaged 9.25 percent, down from 9.36 percent last week, while one-year adjustable-rate mortgages had an average initial rate of 7.59 percent, down from 7.68 percent last week, the Federal Home Loan Mortgage Corp. said.

Sony said it will manufacture major portions of a new laptop computer being developed by Apple.

GM's credit rating was lowered by Moody's Investors Service, one day after the automaker reported a quarterly loss of $1.6 billion. The ratings agency also downgraded debt of the automaker's financial arm, General Motors Acceptance Corp., and its overseas operations.

US West agreed to pay a $10 million civil fine for violating the 1982 consent decree that broke up AT&T, the Justice Department said. US West admitted to four violations of the decree, which restricts the types of businesses and services spun-off firms may provide.

Harley-Davidson reached a tentative agreement with union negotiators to end a two-week strike at its York, Pa., motorcycle plant that has kept more than 1,400 workers off the job.

Chrysler will cut up to 3,000 employees from its salaried work force as part of cost-cutting program aimed at reducing by $3 billion its annual $30.5 billion costs.

Seven companies, including four based outside Japan, agreed to join in a Japanese project to develop engines for hypersonic jet planes capable of flying between New York and Tokyo in three hours. Direct flights between Tokyo and New York now take more than 12 hours.

A ban on billboards along many rural highways is among proposals contained in the administration's $105 billion transportation bill.

Lockheed rejected billionaire Harold Simmons's latest bid for seats on the board, apparently ensuring a proxy war for control of the defense contractor at its April 2 annual meeting.

The last Thalhimer, after five generations, is leaving the department store chain of the same name. William B. Thalhimer III, 45, said he will leave Richmond-based Thalhimer Bros. Inc. at the end of the month.

General Electric received a $151 Navy contract for antisubmarine warfare systems.