What was going on when I was born?

JORGE MESTER, conductor of the Juilliard Orchestra, was exhilarated. ''I wanted to start off with a work that was deeply involving; something that would immediately set up an emotional relationship that would then carry us through a wonderful year.'' The composition Mr. Mester chose for the opener of his first full season at the Juilliard School was the Sixth Symphony in A minor of Gustav Mahler. ''We just had a read-though of the score,'' he said. ''It went beautifully. Twenty years ago, this would have been an impossible task, but musical training in this country has progressed so spectacularly that this immense and complex work presented no difficulties to the student orchestra, either musically or emotionally.''

Stock prices, swept by heavy profit taking, fell precipitously. The Dow Jones industrial average, after soaring 108 points in the previous six sessions, dropped below 1,000, declining 18.21 points, to 996.87. But declining stocks on the Big Board outnumbered those advancing by only 973 to 747. The biggest losses were posted by the blue chips and technology issues that had led the market's surge. Volume fell to 107.5 million shares. (D1.) Short- and long-term interest rates rose sharply in light but steady selling. Dealers cited profit taking. (D9.) The Fed's money supply report, due today, is expected to show an extraordinary surge of $7 billion to $12 billion in M-1 for the week ended Oct. 6. (D10.) Assets of the nation's money market funds rose $2.8 billion in the week ended Wednesday, to a record $227.4 billion. (D2.)

Chicago City Limits, a seven-member comedy team that uses suggestions called out by the audience to create songs and scenes, has a series Friday nights at 11 in which guest comics perform their own material and then improvise with the hosts. Tonight the guest will be Paul Reiser, who did a stand-up routine in the film ''Diner.'' The site is the Jan Hus Playhouse, 351 East 74th Street. Admission is $10. Information: 772-8707. KONITZ AT RIVERBOAT Lee Konitz, alto-saxophone player and Charlie Parker disciple, and his quintet are at the Riverboat, on the ground floor of the Empire State Building, Fifth Avenue and 34th Street, to open a jazz series, Thursdays to Saturdays, at 7 and 10 P.M. The dance floor is open all evening. Admission is $4; no minimum or cover. Reservations: 736-6210.

The International Telephone and Telegraph Corporation said yesterday that it had agreed to sell its French telecommunications operations to the French Government for 215 million francs, or about $30.2 million. The price is less than the price of 350 million francs, or $50 million, called for in a preliminary agreement reached in July. But that agreement called for I.T.T.'s French operations to be audited and for the company to assume 1982 losses above a certain level. The new, lower price in the final agreement apparently accounts for those losses, according to Bryce Miller, an I.T.T. spokesman.

It was never supposed to happen in this prosperous company town. The Caterpillar Tractor Company - known for good management and efficient plants - had been one of the success stories among American heavy manufacturers. But the company's good fortune, which was barely disturbed by the 1974-75 recession, has ended. As a result of the current recession, Caterpillar has been forced to lay off 17,400 workers. And since Oct. 1, the company has been the target of a strike by the United Automobile Workers that has idled another 22,600 nationwide.

Working out of a small storage closet in a basement hallway, Lieut. Robert Louden talked about baseball, television and the city's criminal-justice system yesterday with the man who was holding hostages in a hospital locker room. The lieutenant, who heads the City Police Department's hostage negotiating team, was down the hall - just yards from the locker room where Larry Gardner had taken five hospital employees prisoner in midmorning. The black door in front of the locker room at Kings County Hospital in Brooklyn was closed tight. But the scene outside was busy, as Lieutenant Louden and a half-dozen members of the negotiating team carried on a nonstop conversation with the convicted robber.

A convicted robber facing sentencing today to a long prison term grabbed a guard's gun during a routine visit to Kings County Hospital in Brooklyn yesterday, shot the guard in an arm and took five hospital employees hostage in a basement locker room. Then, with two or three bullets left, he held off a cordon of policemen in a siege that began about 10 A.M. and continued into the early morning today. One hostage was released unharmed at 4:10 P.M. Last night, two others were freed, also unhurt, one shortly before 9 and the other at 11:30. The convict, identified as 34-year-old Larry Gardner, also known as Larry Van Dyke, was said to have a long criminal record. Police hostage negotiators, at the gunman's behest, provided him with a telephone link and a television set in addition to blankets, pillows, cigarettes and coffee. Neither of the hostages remaining early today was reported injured.

International The United States and Israel agreed on the need for early withdrawal of Israeli, Syrian and Palestinian forces from Lebanon, and expressed the hope that it could take place by the end of the year. At a fourhour meeting at the State Department, the two countries set up a working group to begin examining proposals for bringing about the withdrawal and for providing security for Israel's northern borders. (Page A1, Column 6.) Ten days of sweeps in West Beirut by Lebanese Army forces resulted in 1,441 arrests, the seizure of tons of arms and ammunition, and the confiscation of 23,000 forged identity papers, the Government announced. (A9:1.)

Every municipal agency in New York City has been ordered to cut its budget by 6 percent for the fiscal year starting next July, the city's Budget Director, Alair A. Townsend, said yesterday. The order, which would mean a saving to the city of about $540 million, was sent to agency heads last Tuesday, Miss Townsend said, after continuing signs that the city's financial condition was far worse than expected. She attributed the fiscal problems to the cost of the recent contract that the city agreed to with its unions as well as the sluggish national economy, which has cut sharply into city tax revenues. City officials previously disclosed that agency heads had been told at a City Hall meeting last Friday to trim their expenses by 2.25 percent this year. That number was to grow to 4 percent in the 1984 fiscal year, which begins next July 1.

The Metropolitan Transportation Authority will announce today that it plans to purchase 225 air-conditioned, graffiti-resistant subway cars from a new company owned by French and American interests, officials in Paris and New York said yesterday. The new cars will be assembled at the old Brooklyn Army Terminal, thus becoming the first subway cars put together in New York City since the early part of the century. In a related development, the authority yesterday completed the sale of its first revenue-backed bonds, which will be used for capital improvements, including the new subway cars. The obligation on the bonds will be paid off through M.T.A. revenues, including fare-box receipts. In the long run, authority officials said, these obligations to investors could result in increases in the city's bus and subway fares.

The Continental Illinois Corporation, which lost $61 million in the second quarter, yesterday stunned bank analysts by reporting that its problem loans had surged to $2 billion in the third quarter and that its earnings had plunged 52 percent from the third quarter of 1981. This was in sharp contrast to yesterday's quarterly earnings report by the Chase Manhattan Corporation, which also suffered a secondquarter loss, of $16.1 million. Chase's earnings rose 7 percent, to $124 million, from its strong performance in the third quarter of 1981. In that quarter, its net operating earnings, before securities transactions, was $116 million.

''What a shame you were not there. You missed a funny performance.''