May 5, 1981

Robert Sands, the Irish Republican Army hunger striker and Member of Parliament, died early today on his 66th day without food. He had begun his fast in an effort to force the British Government to recognize I.R.A. inmates as political prisoners rather than common criminals. Death came to Mr. Sands at 1:17 A.M. (8:17 P.M. Monday, New York time) in the hospital wing of the Maze Prison, where members of his family had been conducting an anxious vigil for several days. ''He just finally starved to death,'' said a Government official. The I.R.A. said this morning that Mr. Sands would be buried later this week ''with all the ceremony due a republican volunteer.'' Soon after 2 A.M., I.R.A. sympathizers in cars with loudspeakers and sirens began spreading the news of Mr. Sand's death through Roman Catholic neighborhoods of Belfast.

Stock prices plunged yesterday in reaction to sharply rising interest rates, including another jump in the prime rate at several major banks. The main casualties were the blue-chip and technology issues as well as Amax Inc., a producer of nonferrous metals. The Dow Jones industrial average, which was off 16.21 points in the first half-hour of trading, closed down 16.48 points, to 979.11, after a small upturn in the last hour. At 2:30 P.M., the blue-chip barometer was off 20 points at 975.59, its low for the session. Analysts attributed the late upswing to bargain hunting.

Hundreds of New Yorkers with complaints about city services - from broken street lights to uncollected garbage to heatless buildings - have found that one of the best ways to get attention from City Hall is to go straight to the Mayor at one of his local ''constituent hours.'' A team of about 30 full-time employees, known as the Community Assistance Unit, specializes in following up on complaints from the constituent hours and from the 59 community boards. The unit, which cuts red tape and finds the right person in the right agency, is a cross between an information and referral service, an ombudsman and a professional harasser of city bureaucrats. The assistance unit's primary responsibility is to the community boards and the city's vast array of community groups - block associations, tenant councils, civic associations and merchants groups. To get priority from the unit, New Yorkers can address complaints through those groups.

The discount rate was raised to a record 14 percent from 13 percent. The Federal Reserve, struggling to curb recent sharp rises in the nation's money supply, also raised the surcharge that big banks that borrow frequently at the 12 regional Reserve Banks must pay to 4 percentage points from 3. (Page A1.) The prime lending rate was increased to 19 percent from 18 percent by major banks across the country. The unusually large onepercentage-point jump reflected the sharply higher cost of funds banks are paying - rises that bankers called stunning. (D1.)

President Reagan announced today that he would nominate Reese H. Taylor Jr., a lawyer in private practice, to the Interstate Commerce Commission for a seven-year term. If Mr. Taylor is confirmed by the Senate, President Reagan intends to name him chairman of the I.C.C. Mr. Taylor, who turns 53 years old on Wednesday, was chairman of the Public Service Commission of Nevada from 1967 to 1971 and was vice chairman of the Nevada Tax Commission. A graduate of Stanford University and Cornell University Law School, he was previously associated with law firms in Las Vegas, Nev., and Los Angeles. He is now in private practice with Allison, Brunetti, MacKenzie & Taylor in Carson City, Nev.