October 2, 1981

The Government reported today that factory orders in August fell 1.9 percent, the largest monthly decline in more than a year and a sign that the current economic sluggishness may get worse. The drop was almost entirely in the closely watched level of orders for durable goods, down 3.48 percent, to $86.32 billion, in August from July, the most for this ca tegory in a ye ar. It was a steeper decline for durables than contained in the ad vance report for August issued nine days ago: That report showed a 2. 48 percent fall.

''Saudi Arabia, we will not permit to be an Iran.'' - President Reagan. (A1:6.)

President Reagan pledged to veto any appropriations bill that violates his plan to reduce Federal outlays. He called at a news conference for public patience with his economic program. (Page A1.) The President, in an effort to show Wall Street support, cited a Securities Industry Association letter. (A22.) Meanwhile, his budget chief, David A. Stockman, told Congress it would have to cast painful budget-cutting votes ''again and again and again.'' (A29.) The economy will remain slow through the first half of 1982, according to economists and businessmen at a Conference Board symposium. Many expressed surprise that business has remained as strong as it has in the face of high interest rates. (D1.)

The International Bu siness Machines Corporation yesterday confirmedreports that it was planning to abandon its product-group marketing in favor of a n approach that would enable customers to buy a wide range of I.B. M. products from a single sales representative. ''This new marketing structure will simplify the distribution of our products and better serve our customers' needs,'' John R. Opel, I.B.M.'s president and chief executive, said in a prepared statement. The reorganization calls for employees in I.B.M.'s data processing, general systems and office products groups to be combined into two new divisions, ''each of which will market our full product line to a specific set of customers,'' Mr. Opel said. As a first step toward that restructuring, which will take place in early 1982, I.B.M. announced today that all marketing and service activities would be combined into a single group known as the Information Systems Group, to be headed by C.B. Rogers Jr., a vice president.

International A firm pledge to protect Saudi Arabia was given by President Reagan. He said the United States would not allow the Saudi Government to fall into the hands of any internal or external forces threatening to cut off oil supplies for the West. He left unspecified the means that would be used to carry out the pledge. (Page A1, Column 6.) The sale of Awacs planes to the Saudis was pressed before the Senate Foreign Relations Committee by Secretary of State Alexander M. Haig Jr. He asserted that new ''understandings'' had been reached with Saudi Arabia to increase and extend American control over Saudi missions, but he faced renewed skepticism and opposition to the proposed sale from most members of the committee. (A28:1-2.)