What was going on when I was born?

A front-page picture caption Thursday with an article about flooding in New Jersey incorrectly identified the area from which people were leaving their homes by boat. It was in an area of Lincoln Park flooded by the Pompton River.

''Our sovereignty was violated and we reacted, as we said we would all along, in a defensive manner.

The Continental Group, the diversified can company, has spent several years reshaping itself. In 1977, it acquired several insurance companies, and two years later, an oil and gas company. Last year, it shed part of its paper operations and bought back a large chunk of its stock. Finally, just when management seemed happy with its campaign of redeploying assets, Sir James Goldsmith, the British financier, has informally offered to buy Continental for about $50 a share, or $2.1 billion.

Two Saudi Arabian fighter pilots shot down two American-built Iranian F-4 fighters today, Saudi and United States officials said. The Saudi pilots were flying American-built F-15's and had help from United States aerial tanker planes and surveillance planes, they said. In London, President Reagan was said to be concerned that the Saudi air action could intensify the fighting. In Kuwait, Western and Arab officials described the aerial fight as a widening of the conflict. Iran said 600 people were killed in an Iraqi air raid on the town of Baneh, but did not make any immediate comment on the aerial clash with the Saudis. (Page A3.)

Key legislators have agreed that New York should require motorists to wear seat belts. They say that they are committed to passing such legislation in the next few weeks. It would be the first such law in the country. Important details remain to be worked out, including the penalties for failure to observe the law and precisely who would be required to buckle up. The measure would not apply to vehicles that are not required to have seat belts, such as cars built before 1966 and school buses.

A 179-acre area adjoining Shea Stadium in Queens is the leading choice as the site for a domed sports stadium in New York City, the chairman of the State Urban Development Corporation said yesterday. The chairman, William J. Stern, said that a vacant 20-acre area at Battery Park City had become the first choice as the site for a new basketball and hockey arena should a decision be made to close Madison Square Garden. He also held out the possibility that, if the Garden remained open, a third professional basketball team for the metropolitan area could be drawn to a new arena in the Atlantic Terminal area of Brooklyn, at the site of Aqueduct Race Track in Queens, or near Shea Stadium. Mr. Stern made his comments after the 10- member board of the New York State Sportsplex Corporation, a U.D.C. subsidiary, discussed the findings of a team of consultants. The board also voted to recommend that a $55 million, 20,000-seat baseball stadium be built in downtown Buffalo and that the state contribute $22.5 million.

In a surprise move, Roger E. Birk, chairman and chief executive officer of Merrill Lynch & Company, the parent of the world's largest securities firm, announced yesterday that he plans to retire as chief executive officer July l. William A. Schreyer, currently president of the holding company, will become chief executive as well. Mr. Birk plans to remain working full time as chairman until July 14, 1985, his 55th birthday. The resignation comes at a time when Merrill's earnings have been plunging and the firm is about to embark on an ambitious restructuring and cost-cutting program. Although Mr. Birk has said for several years that he was planning an early retirement, the announcement led to widespread speculation, both within the firm and on Wall Street, that he had been forced to relinquish the title of chief executive. Mr. Birk and several outside directors said that was not the case.

''MY dream dinner would be a pizza with pepperoni, a baked potato with sour cream and scallions, and for dessert a white chocolate mousse,'' the New York City Ballet dancer Heather Watts said recently. ''I'm not very disciplined so I don't know what I'd do if I put on weight. I couldn't starve to dance.'' ''Usually,'' she continued, ''I eat ice cream twice a day. I love sugary stuff and beer and wine. An hour before a performance I eat a muffin or some potato chips. For a long while I'd wake up around 4 every morning and eat chocolate-chip cookies with my cat. Poor thing, she looked awful she got so fat.'' Studies show that most dancers do not eat well. Food fadism, binging and starving, and irrational use of nutritional supplements appear to be common among them. How they maintain their stamina, manage to look beautiful and keep vigorous schedules is something of a mystery.

President Reagan and Prime Minister Margaret Thatcher conferred today amid indications that they would press other Western leaders this week for a commitment to improve efforts to combat terrorism. American and British officials said political issues in general could overshadow economic matters on the official agenda. They said that during mealtime discussions, the leaders would pay particular attention to relations with the Soviet Union and the crisis in the Persian Gulf resulting from air attacks in the war between Iran and Iraq. Cooperation Is Sought Mrs. Thatcher, the host of the economic conference of major industrial democracies, has been interested in a public statement condemning terrorism ever since a British police officer was killed in April by gunfire from inside the Libyan Embassy.

WEDNESDAY, JUNE 6, 1984 Companies A $2.1 billion offer for Continental Group was made informally by Sir James Goldsmith, the chairman of Cavenham and Generale Occidentale. Continental, formerly Continental Can, termed the offer ''unsolicited,'' indicating that it would not be receptive. Executives close to the situation stressed that the approach was intended to be friendly. (Page D1.) Continental has just come through a campaign of redeploying assets. (D1.) Merrill Lynch's chief executive, Roger E. Birk, stepped down at 53, in a surprise move. He will be replaced by William A. Schreyer, president. Mr. Birk's resignation comes at a time of plunging earnings for the parent of the world's largest securities firm, but the executive and several directors said he was not forced out. (D1.) Mr. Schreyer is a popular figure who faces a a tough job: cutting costs and reshaping Merrill into a leaner competitor. (D1.)

Sir James Goldsmith, the British industrialist, offered informally yesterday to buy the Continental Group, formerly called the Continental Can Company, for $50 a share, or at least $2.1 billion in cash. Caught by surprise, Continental termed the offer ''unsolicited,'' a Wall Street buzzword almost always meaning that the company is not particularly interested. It added that a letter outlining the proposal did not constitute what it felt was a formal offer. Indicating widespread leaks to investors, Continental stock jumped $5.50 on the New York Stock Exchange last Friday and Monday, before the offer became public. It jumped an additional $3 yesterday, to $42.50. Continental had said on Monday, after its stock surged $4.25, that it was not aware of any reason for the increase.

Army troops sent to quell violence in Punjab continued to trade fire today with Sikh terrorists firing mortars and machine guns from inside a Sikh shrine in Amritsar after a daylong battle Tuesday, the Government said. Two people outside the Golden Temple, the holiest of Sikh shrines, were reported killed in the fighting Tuesday. One of them was said to be a soldier. A report this morning from Chandigarh, the state capital of Punjab, said that Harchand Singh Longowal, president of the Akali Dal political party and leader of the moderate wing of the Sikh protest, had surrendered to security forces at the Golden Temple. Surrendering with him, according to the report, was G. S. Tohra, the chief administrator of all the Sikh temples in Punjab, who is another major figure in the moderate camp.