May 7, 1981

''IDON'T know why people always think of the Kennedys as a Boston family,'' said Jean Kennedy Smith, sitting on her New York patio. It was the most glorious spring afternoon New York has seen this year. New York sparrows were chirping in the oak branches above, New York traffic hummed in the distance, and Mrs. Smith was there to talk about the two-day arts festival she'd helped bring to New York. ''It always made me laugh when they claimed that Bobby was a carpetbagger,'' she said of her late brother, Senator Robert F. Kennedy. ''We all grew up in Bronxville, I went to Manhattanville College of the Sacred Heart - in the old location on Convent Avenue - and I've lived here since 1962. I couldn't feel more like a New Yorker.''

A Norwegian freighter and a Staten Island ferryboat bound for Manhattan carrying 2,340 passengers collided in dense fog yesterday morning, injuring more than 60 of the ferry's passengers and causing hundreds of others to scramble for life preservers. After disentangling, the two vessels moved away under their own power. The ferry, with a hole 30 feet long and three levels high in her side, returned to the St. George terminal on Staten Island. The injured were taken by cars and ambulances to local hospitals, where all but three were released after treatment. No injuries were reported aboard the freighter, the Hoegh Orchid, owned by the Oslo-based Hoegh Line, which received a five-foot gash in her bow. The Coast Guard said the vessel was traveling from Halifax, Nova Scotia, with a general cargo, including tea and coffee from Indonesia.

An offer by Dome Petroleum Ltd. of Canada to pay $915 million for a minority stake in Conoco Inc. was made, without prior consultation with Conoco, as a way to avoid payment of capital gains taxes, insiders said yesterday. Dome's unusual approach would enable the Canadian oil company to swap the 14 million Conoco shares it wants to buy, at $65 a share, for Conoco's 53 percent block in the Hudson's Bay Oil and Gas Company. It was devised to get around a tax problem that would arise for Conoco in the exchange for the shares of Hudson's Bay, headquartered in Calgary, Alberta. The Dome proposal grew out of a problem that developed last year after Esmark Inc. sold its Vickers oil properties to the Mobil Oil Corporation. In that case, Mobil first agreed to pay Esmark $715 million for Vickers and then bought $715 million worth of Esmark stock to pay for Vickers. That ostensibly made the transaction taxfree for Esmark.

The United States ordered today that Libya close its diplomatic mission in Washington and remove the mission staff from the country. It cited ''a wide range of Libyan provocations and misconduct, including support for international terrorism.'' A statement by the State Department said that the United States was troubled by ''a general pattern of unacceptable conduct'' by Libya, which it said ''is contrary to internationally accepted standards of diplomatic behavior.'' Dean Fischer, the State Department spokesman, declined to give details. But officials said that the Reagan Administration had a list of complaints, including alleged efforts by Libyans to murder opponents of Libya's revolutionary leader, Col. Muammar el-Qaddafi, and Libyan activities in Chad, the Sudan and Egypt.

Interest rates are likely to climb and stay high for several months, Treasury Secretary Donald T. Regan said. The deficit in fiscal 1981 could be as high as $60 billion, or $2 billion to $5 billion above earlier forecasts, as a result of rate increases since March, he said. Calling this year's budget experience ''a disaster,'' he put U.S. borrowing needs in fiscal 1981 at $75 billion to $80 billion. (Page A1.) The U.S. merchandise trade deficit narrowed in the first quarter, to $3.7 billion on a balance-of-payments basis, from $6 billion in 1980's last quarter, the Commerce Department said, citing a sharp increase in exports of heavy machinery. (D2.)