Boeing, seeking the top spot in the satellite market, plans to buy Hughes Electronics' satellite-manufacturing business for about $4 billion, sources said. Hughes Space and Communications has made 40 percent of the satellites in commercial operation, including the world's first geosynchronous communications satellite in 1963. Boeing and Hughes declined to comment.

Merrill Lynch said David Bowers, its chief European equity strategist, will become chief investment strategist at the largest U.S. brokerage firm, the first time someone from outside the United States has been appointed to the post. Bowers, 40, will replace Charles Clough, 57, who is retiring after 13 years. Clough's retirement was announced in August.

A former Salomon Smith Barney associate was sentenced to probation for passing along confidential information about planned mergers involving the company's clients to a former executive at the Bank of Tokyo-Mitsubishi Trust. Kevin Kirkbride, who was a junior banker at Salomon Smith Barney, admitted last year that he had tipped off Richard Ference. Ference placed orders for the stock in his name and the two men split illicit profits of $750,000, authorities charged. Ferrence was sentenced last month to 21 months in prison and has agreed to pay a fine of more than $1 million to settle a civil suit by the Securities and Exchange Commission.

Merrill Lynch said it will close its agricultural and metals research and trading businesses next month, following other Wall Street firms out of the slumping commodities markets. The move reflects the sector's shrinking margins, which have prompted other financial services firms, including Citigroup and Lehman Brothers Holdings, to reduce their involvement in the business or to leave it completely.

A squeeze in computer chip supplies caused by rising demand means consumers will pay more for electronics over the next two years, analysts said. The cost of some chips has more than doubled in recent months, and the tight supply probably will continue through 2002 until new production plants come online, according to experts.

IBM will sell data-storage products and flat-panel screens through Bell Microproducts, bringing in as much as $2 billion in sales for the No. 1 computer maker. Bell Microproducts also will package IBM products such as tape systems and hard drives and resell them to computer dealers and installers under the four-year agreement. IBM has similar parts agreements with Dell and EMC.

A veteran Fidelity fund manager, George Vanderheiden, plans to retire Feb. 1 after 29 years at the mutual fund company. Vanderheiden, 54, managed $36 billion at Fidelity. His three funds have trailed the Standard & Poor's 500-stock index the past five years. Vanderheiden, who said he wants to spend more time with his family and pursue outside interests, manages the Fidelity Advisor Growth Opportunities Fund, the Variable Insurance Products III Growth Opportunities Portfolio and the Destiny I fund.

Yields on 10-year, inflation-indexed notes rose in yesterday's auction. The yield was 4.338 percent, up from 4.040 percent at the last auction on July 7. In addition to the yield, owners of the notes receive an inflation-indexed adjustment to principal twice a year.

LOCAL BUSINESS

Government Technology Services' shares jumped 33 percent after the computer-equipment reseller said it's near an agreement to sell Red Hat's Linux operating system to the U.S. government. Government Technology rose $1.68 3/4, to $6.75, in trading of 7.8 million shares, more than 200 times the three-month daily average. Earlier, they reached a 52-week high of 10.93 3/4. Chantilly-based Government Technology is the leading provider of computer products and services to the federal government.

Potomac Electric Power said it is mailing letters to about 2,000 potential bidders for the power plants it intends to sell. Initial bids are expected in March, at which point the bidding will be narrowed. Pepco, which announced last year that it will sell the plants, expects to select a buyer in June. The company plans to concentrate on retailing electricity and other products rather than manufacturing power.

XM Satellite Radio Holdings of the District plans to raise about $150 million by selling 6 million shares of stock, with the proceeds to be invested in a satellite radio-broadcast system that will beam signals to motorists. The company said in a regulatory filing it expects to sell 4 million common shares and 2 million convertible preferred shares.

U.S. Foodservice in Columbia said it will distribute $600 million worth of food and related products to Chili's restaurant unit over the next three years. The deal with Chili's parent, Brinker International, will involve Brinker-owned Chili's restaurants in the United States except those in Florida and parts of the Southeast.