August 1, 1984

The index of leading economic indicators, which the Government uses to project the economy's performance six months or a year ahead, showed a sharp decline of nine-tenths of 1 percent in June, the Commerce Department said today. The index is notoriously volatile, subject to revisions that can show it moving in the opposite direction from the one first reported. But the steepness of the decline reported today appeared to confirm a trend toward slower expansion that has been reflected in the index since spring. Analysts expressed relief that the heated economic growth of the last 19 months appeared to be cooling. ''We need a report like that,'' said Morris Cohen, an economic forecaster in Hackensack, N.J. ''Everybody's been saying we need a slowdown. And, lo and behold, here's the evidence.''

The United States men's gymnastics team, alternately cautious and daring, won the team gold medal in tonight, upsetting the reigning world champions from China. ''This is certainly comparable to the U.S. hockey team winning the gold medal in 1980,'' said Abie Grossfeld, the team's head coach, as a near-capacity crowd of 9,356 at Pauley Pavilion waved American flags and chanted ''U.S.A.! U.S.A.!'' behind him. The startling victory capped a day of competition in which the United States continued to dominate swimming, winning all five finals including a victory by Rick Carey of Mount Kisco, N.Y., in the men's 200-meter backstroke. The United States also won a gold in shooting as 18-year-old Pat Spurgin of Billings, Mont. took the women's air rifle competition. The Americans won seven gold medals yesterday to bring their total to 16 gold - 11 in swimming - in three days. In addition, the American men's and women's basketball teams looked impressive in winning their second games in the round-robin competitions.

The Champion International Corporation and the St. Regis Corporation announced jointly yesterday, as exp ected, that they had signed a definitive agreement to merge the two big paper companies in a deal valued at $1.7 billion in cash and stock. The merger would create the nation's biggest paper producer in terms of sales, far outstripping the Georgia-Pacific Corporation, the current leader. It would also challenge the International Paper Company for the top spot in the industry in terms of pulp and paper tonnage produced. Reflecting typical takeover patterns, Champion stock fell $1.875, to $17.25, on the New York Stock Exchange. St. Regis shares closed at $49.875, off a slight 37 1/2 cents.

The Champion International Corporation's proposal to acquire the St. Regis Corporation would create the nation's largest forest products company, and, analysts say, set the stage for an expected flurry of mergers and acquisitions in the industry. Nevertheless, Champion's move brought mixed reactions from Wall Street. Some analysts saw it as aggressive and gutsy, putting Champion's chips strongly in the paper industry and lessening its reliance on the cyclical building-products industry. Others questioned the deal's financial structure, noting its debt load for Champion and saying that it would dilute the value of Champion's stock. Business benefits from the combination might not materialize for a few years, they said.

The International Business Machines Corporation yesterday announced bonuses for both investors and customers. The electronics concern gave its first dividend increase in 15 months and said owners of its much-criticized PCjr home computer could get a new keyboard free. Analysts said the dividend increase, from 95 cents a share to $1.10, was surprising but reflected I.B.M.'s strong profits. The company's sales this year have exceeded the forecasts of many analysts.