In the 940 wagons, the in-window antenna has an amplifier located below the left rear window. It's powered by a green-grey wire from the radio harness. In sedans that same wire is used for the power antenna motor. That wire is supposed to get power whenever the radio is on (thus raising the sedan's antenna). So when you put in a new radio you need to make sure that green-grey wire gets power in order to receive an AM signal. The green-grey wire is on pin 12 of the radio harness next to an orange wire on pin 11. If the radio does not have a power antenna output then tie pin 11 and 12 together. The orange wire on pin 11 gets +12 volts from the ignition (KPI/KPII) through fuse 14.

Other reasons for AM background static are a faulty alternator (static will be in-time with revs) or poor chassis grounding (less common). Some AM background static is normal in fringe reception areas. The antenna feed cable also has to be properly seated in order for the shield to function.

For stock radios, the CR-915 is a known problem area. The AM and/or FM tuner will either lock up or completely fail. The problem may be intermittent at first. I've seen where this may be a circuit board grounding issue, but it smells (figuratively speaking) like it could also be a bad capacitor. I've got a couple of dead CR-915s that are on my DIY fix-up list, but I don't listen to much AM anyway unless a game is on or there's a traffic stall, so I may not get around to this any time soon. If anyone's successfully resurrected a CR-915 I'd be interested to hear about it.

More information on the 940 radio harness is available in this old post. That's for a 1995 940. Earlier 940's will likely be identical unless they have a separate amplifier.
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Dave -940's, prev 740/240/140/120 You'd think I'd have learned by now