May 16, 1984

Victor Posner entered the bidding for City Investing, offering $52.50 a share for the conglomerate, compared with the $50 offered by a management group last week. The Posner group's bid totals $2.4 billion. City Investing said the offer would be studied. (D1.) Continental Illinois used some of its emergency credit line, but it was unclear whether the bank had succeeded in stopping a run on deposits. It would not say how much it had borrowed from the $4.5 billion credit offered by 16 banks or whether it had borrowed from the Federal Reserve. (D1.)

LITTLE more than a generation ago in New York, when big bands swayed through the night and every man wore a hat, some of the best dining in the city was found in hotels. The Ambassador, the Plaza, the Sherry-Netherland, the St. Regis, the Waldorf- Astoria and the old Ritz-Carlton, where the chef Louis Diat invented vichyssoise - those were the places you went for memorable meals. After World War II, however, grand hotel dining slowly went the way of glamorous passenger ships. Perhaps it was because jet-age travelers began treating hotels as little more than expensive pillows, whizzing through town too quickly to enjoy leisurely meals. Or maybe the hotel chains that gobbled up so many independents decided haute cuisine was a dispensable frill. For whatever reason, Recipes are on page C8. hotel cooking sank like a fallen souffle. The term ''hotel food'' became synonymous with gray meat and wizened baked potatoes.

With the banking industry's largest rescue package arranged, David G. Taylor, the chairman and chief executive officer of the beleaguered Continental Illinois Corporation, is clearly the man on the spot in the banking industry. He is in the somewhat delicate position of a doctor whose cure turns into a new ailment. Mr. Taylor, elevated to his present job last February to help rescue the bank holding company and its flagship bank, the Continental Illinois National Bank and Trust Company, did so partly through an injection of funds from Europe and the Far East. Now it is those depositors who, having become skittish over rumors that the bank's financial position had worsened, have caused a new cash squeeze by withdrawing their money. Fortunately for Continental Illinois and Mr. Taylor, American banks stepped in Monday with a $4.5 billion line of credit. The bank is still not in the clear, however. Its new financial backing lasts for just 30 days, after which it will be reviewed. Thus Mr. Taylor has been given time to try to convince depositors that Continental will remain solvent. Continental Illinois first got into serious trouble two years ago after it took over a number of energy-related loans that the Penn Square Bank of Oklahoma City had originated. Penn Square collapsed in July 1982, and many of the loans turned out to be bad.

Hotel restaurants strivingC1 A little respect for rhubarbC1 Wine Talk: CabernetC1 Frying authentic johnnycakeC3 The 60-Minute GourmetC3 A wine writer's palateC4 Food adventures in ChinaC6 Food NotesC9 Living Metropolitan DiaryC2 Jewish students say they want to have familiesC7 DiscoveriesC14 Arts/EntertainmentSchool of American Ballet in three performancesC17Tom Stoppard's "Real Thing" voted best new playC18Fiction award thrusts John Edgar Wideman into limelightC19Mirror Repertory revives "The Hasty Heart"C21Zappa," a Danish film about delinquencyC24Kim," a movie about British India on CBSC24 Sports PagesOilers rout Islanders, 7-2, and take 2-1 lead in finalB11Yankees outslug A's, 9-6B11Celtics rout Bucks, 119-96, in opener of conference finalB11Johnson sets assists mark as Lakers win and take 2-0 leadB11Van Berg's best horse is offbeatB11Clippers move from San Diego to Los AngelesB12Dave Anderson on Dr. Jeykll and Mr. KingmanB13Holmes-Coetzee fight called offB13Plays: Line drive takes funny bounce and becomes an outB13

-Mexico disagreements over Central America were expressed by President Reagan and President Miguel de la Madrid at a White House welcoming ceremony. The Mexican leader warned that the ''risk of a generalized war'' was growing in the region. Mr. Reagan said that responsible governments ''cannot afford to close their eyes to what is happening or be lulled by unrealistic optimism.'' (Page A1, Column 6.) Opponents of Ferdinand E. Marcos appeared to be on the way to winning a larger bloc of seats in the Philippines's new National Assembly than had been expected before Monday's elections. (A1:5.)