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How the Trade and Budget Deficits Have Soared

Mikhail S. Gorbachev told members of Parliament today that his nation was ready to negotiate radical reductions in nuclear arms, but he repeated Moscow's position that the United States had to act first. He put particular stress on the Soviet desire for an end to American efforts to develop defensive weapons in space and for a halt in American testing of antisatellite weapons. Mr. Gorbachev, widely considered the second in command in the Kremlin, said negotiations could move toward prohibiting and eventually eliminating nuclear weapons. 'Realistic Stand' Asked ''It is now up to the United States to make a move, to take this time a realistic stand which would make for effective negotiations,'' he told members of the Select Committee on Foreign Affairs.

New-home construction fell seven- tenths of 1 percent in November to a seasonally adjusted annual rate of 1.53 million units, the lowest level since December 1982, the Commerce Department reported today. But, in a hint of better days ahead, applications for building permits rose for the first time in five months. The November decline was the second in two months and the fourth in the last five months. Housing construction had fallen 8.3 percent in October.

Markets The stock and bond markets surged , spurred by visions of lower interest rates and faster economic growth. The perception that the Federal Reserve has become more generous with the money supply and other encouraging news helped erase fears that the economy was entering a new recession. (Page A1.) The Dow Jones industrial average soared 34.78 points, to 1,211.57, its biggest gain since Aug. 3. Volume swelled to 169.1 million shares, the sixth-heaviest ever. (D1.) Bond prices continued to rise in active trading, as pressures for a cut in the Fed's discount rate mounted. The Federal funds rate, trading in the 6.65 percent to 7 percent range, was down a full percentage point from Monday. (D1.) Gold prices tumbled again, with prices falling to 30-month lows. In late New York trading, gold was off $4.90, to $309.10 an ounce. The dollar fell and the British pound hit a record closing low. (D15.)

Price Waterhouse and Deloitte Haskins & Sells terminated merger negotiations yesterday aimed at creating the world's largest accounting firm after partners in Britain reportedly voted down the proposal. Officials of the two accounting firms refused to disclose results of the vote, in which nearly 4,300 partners cast secret ballots on a country- by-country basis. In a brief statement, the firms said that, ''despite the high level of partner support over all,'' the proposal failed to receive required approval in ''certain important countries.'' The firms said that it had been agreed at the outset of the negotiations that, at a minimum, a majority of the partners in the United States, Britain, Canada and Australia each had to approve the merger.

Spurred by visions of lower interest rates and faster economic growth, the stock and bond markets surged yesterday. The Dow Jones industrial average soared 34.78 points, its biggest gain since Aug. 3, while interest rates continued to plummet and bond prices rose. On the New York Stock Exchange, trading swelled to 169.1 million shares, the sixth-heaviest volume ever. In the money market, the closely watched interest rate on Federal funds - overnight loans among banks - traded generally in the 6.65 percent to 7 percent range, down nearly a full percentage point from Monday. (Page D1.)

The stock market, after weeks of steady declines, exploded upward yesterday in the sixth-heaviest trading ever, fueled by a sharp drop in interest rates. The Dow Jones industrial average soared 34.78 points, to 1,211.57, its biggest daily gain since Aug. 3, when it rose 36 points. The record one-day advance is 43.41 points, set on Nov. 3, 1982. The two other leading market indicators also ended with impressive gains. The exchange's composite index was up 2.35, to 96.78, while Standard & Poor's 500-stock index climbed 4.50, to 168.11.

WEDNESDAY, DECEMBER 19, 1984 International Mikhail S. Gorbachev told the British that the Soviet Union was ready to negotiate radical reductions in nuclear armaments, but he repeated Moscow's position that Washington had to act first. Addressing a committee of Parliament, the Kremlin's second in command put particular stress on the Soviet desire for an end to American efforts to develop weapons in space. (Page A1, Column 3.) A major Soviet military reaction was touched off several days ago by two American aircraft carriers operating near Soviet naval and air bases around Vladivostok, Reagan Administration officials confirmed. They said the unusual Soviet reaction involved at least 100 Soviet jet fighters, bombers and reconnaissance planes as well as surface vessels. A civilian official quoted experienced military officials as describing it as ''the most vigorous Soviet reaction'' to any American military movement of its kind since World War II. (A1:2.)

Two American aircraft carriers operating near Soviet bases around Vladivostok touched off a major Soviet military reaction several days ago, raising concern in the Japanese Government, Administration officials said today. A Defense Department spokesman confirmed that American naval operations in the Sea of Japan ending last week had touched off an unusually heavy reaction involving at least 100 Soviet jet fighters, bombers and reconnaissance planes as well as surface vessels. One civilian official quoted experienced military officers as describing it as ''the most vigorous Soviet reaction'' to any American military movement of its kind since World War II. 'A Response Was Expected' ''When we operate in certain waters or in close proximity to foreign territorial waters, we anticipate a reaction,'' the Defense Department spokesman, Comdr. Fred G. Leeder, said. ''I would deny that those operations were intended to provoke a response, but a response was expected.''

A ruling by the city's Corporation Counsel has cleared the way for the display of the first Christmas scene in Central Park since the 1920's, city officials said yesterday. The Corporation Counsel, Frederick A. O. Schwarz Jr., ruled that the cr eche, as well as two Hanukkah menorahs that have been permitted for the last several years, could be allowed on city property as long as the identity of the sponsoring organization was plainly displayed on an adjacent sign. The Nativity scene, which will be erected at the Columbus Circle entrance to the park, will include a stable and the figures of Jesus, Mary, Joseph and the Three Wise Men. The scene will be erected tomorrow, according to the sponsor, the Catholic League for Religious and Civil Rights.

Defense Department officials acknowledged today that little information about space shuttles with military cargo could be kept from the Russians, even if secrecy is imposed. But the officials, explaining a policy announced Monday, said such secrecy was worth the effort. ''Space is a big place,'' one official said. ''The less they know, the harder it will be for them to find us out there.'' Another official said, ''It will keep them off balance - we want to mess with their minds.''

White House and State Department officials are locked in a dispute over plans by Secretary of State George P. Shultz to replace ranking officials and diplomats who are political appointees with Foreign Service officers, according to Administration officials. White House officials said the move by Mr. Shultz to replace several key officials and ambassadors had angered conservatives in the Administration, especially when such conservatives as Edwin Meese 3d, the White House counselor, and Jeane J. Kirkpatrick, the representative at the United Nations, were scheduled to leave their posts. Career Officers Accused White House and State Department officials both say the dispute involves not only the ascendency of Mr. Shultz in personnel matters in which the White House plays a key role, but also accusations that career Foreign Service officers close to Mr. Shultz and some White House aides were ignoring what they considered to be President Reagan's conservative mandate. State Department officials said the changes being planned included the departure of these political appointees: - Richard T. McCormack, Assistant Secretary for Economic and Business Affairs, who is a former aide to Senator Jesse Helms, Republican of North Carolina; - Gregory J. Newell, Assistant Secretary in the Bureau of International Organization Affairs; - James L. Malone, Assistant Secretary for Oceans and International Environmental and Scientific Affairs.