December 19, 1984

How the Trade and Budget Deficits Have Soared

Mikhail S. Gorbachev told members of Parliament today that his nation was ready to negotiate radical reductions in nuclear arms, but he repeated Moscow's position that the United States had to act first. He put particular stress on the Soviet desire for an end to American efforts to develop defensive weapons in space and for a halt in American testing of antisatellite weapons. Mr. Gorbachev, widely considered the second in command in the Kremlin, said negotiations could move toward prohibiting and eventually eliminating nuclear weapons. 'Realistic Stand' Asked ''It is now up to the United States to make a move, to take this time a realistic stand which would make for effective negotiations,'' he told members of the Select Committee on Foreign Affairs.

New-home construction fell seven- tenths of 1 percent in November to a seasonally adjusted annual rate of 1.53 million units, the lowest level since December 1982, the Commerce Department reported today. But, in a hint of better days ahead, applications for building permits rose for the first time in five months. The November decline was the second in two months and the fourth in the last five months. Housing construction had fallen 8.3 percent in October.

Markets The stock and bond markets surged , spurred by visions of lower interest rates and faster economic growth. The perception that the Federal Reserve has become more generous with the money supply and other encouraging news helped erase fears that the economy was entering a new recession. (Page A1.) The Dow Jones industrial average soared 34.78 points, to 1,211.57, its biggest gain since Aug. 3. Volume swelled to 169.1 million shares, the sixth-heaviest ever. (D1.) Bond prices continued to rise in active trading, as pressures for a cut in the Fed's discount rate mounted. The Federal funds rate, trading in the 6.65 percent to 7 percent range, was down a full percentage point from Monday. (D1.) Gold prices tumbled again, with prices falling to 30-month lows. In late New York trading, gold was off $4.90, to $309.10 an ounce. The dollar fell and the British pound hit a record closing low. (D15.)

Price Waterhouse and Deloitte Haskins & Sells terminated merger negotiations yesterday aimed at creating the world's largest accounting firm after partners in Britain reportedly voted down the proposal. Officials of the two accounting firms refused to disclose results of the vote, in which nearly 4,300 partners cast secret ballots on a country- by-country basis. In a brief statement, the firms said that, ''despite the high level of partner support over all,'' the proposal failed to receive required approval in ''certain important countries.'' The firms said that it had been agreed at the outset of the negotiations that, at a minimum, a majority of the partners in the United States, Britain, Canada and Australia each had to approve the merger.