October 31, 1986

After months of long-distance campaigning in which they impugned each other's character and ethics, Governor Cuomo and Westchester County Executive Andrew P. O'Rourke took it all back yesterday. The Governor and Mr. O'Rourke, the Republican candidate for governor, appeared with District Attorney Denis E. Dillon of Nassau County, the Right to Life Party candidate, in their only debate of the campaign, a 90-minute session at The New York Times. The debate produced disagreement on some issues but less heat than their repeated arguments over whether and how to debate - an issue that has dominated the campaign. The exchange was a snapshot of the campaign as a whole - Mr. Cuomo not making commitments, Mr. O'Rourke failing to engage him - that went a long way toward explaining why Mr. Cuomo holds a lead of 50 percentage points in the polls. [ News analysis, page B5. ] Aides of both Mr. Cuomo and Mr. O'Rourke said they had urged their candidates to tone down the remarks so that Mr. Cuomo, a skilled debater, would not come across as the heavy or so that Mr. O'Rourke would not appear undignified. ''Everybody was on their best behavior,'' said the O'Rourke campaign communications director, Richard Behn.

Police Commissioner Benjamin Ward is planning a large-scale transfer of supervisors, and possibly patrol officers, from the 77th Precinct in Brooklyn, where 13 officers have been suspended amid accusations of corruption and misconduct, law-enforcement officials said yesterday. The officials said the transfer of supervisors, which might also involve higher-ranking officers in the Brooklyn North command, was not meant to imply that the supervisors were involved in any wrongdoing. Rather, they said, the moves were meant to bring ''new blood'' into the troubled precinct. #200 Patrol Officers At the same time, officials said Mr. Ward had been considering the eventual transfer of virtually all of the more than 200 patrol officers assigned to the precinct, which is in the Bedford-Stuyvesant section.

The Reagan Administration has agreed to offer Honduras a more advanced jet fighter and to upgrade its aging squadron of warplanes, State Department officials said today. The decision represents a reversal of a United States policy of not being the first to introduce advanced fighter planes into Central America. The step was taken in anticipation of what officials said was a possible military confrontation between Honduras and neighboring Nicaragua as the United States-backed insurgency in that country increases with the infusion of $100 million in new American aid. Nicaragua Assails Plan Michael H. Armacost, Under Secretary of State for Political Affairs, will play a major role in supervising Central Intelligence Agency operations financed by the $100 million, officials said. Mr. Armacost, who had never been to Central America, flew there this week for what the State Department called ''an orientation trip.''

For investors, the rules of the game are radically changed. In sweeping fashion, the new tax law has dramatically diminished the returns of some investments and enhanced the yields of others. Tax shelters and real estate lose many of their appealing tax benefits, while stocks, gold and collectibles become less rewarding with the repeal of preferential capital gains rates. By contrast, investments that had no special tax advantages under the old law - such as bank accounts, money market funds and corporate bonds -gain new appeal with the reduction in individual tax rates. Although the Tax Reform Act of 1986 will only marginally change the attractiveness of some investments, others will be substantially altered. As a result, the tax changes will force individuals to assess the relative merits of investments in a new light.

The Koch administration's proposal to build 20 shelters for the homeless throughout the city comes while its homeless policies in midtown Manhattan are facing organized, well-financed and politically savvy opposition. At issue is the city's policy of housing more than a thousand homeless families in a handful of midtown hotels - hotels that now hold more homeless families than are sheltered in the other four boroughs combined. In this battle, residents of the neighborhood who began protesting months ago have been joined by business interests in the area to form a potent group of adversaries, from real-estate interests that are largely financing the fight, to clergymen who have given it their moral support. 'Double-Pronged Problem' There include big property owners like Jack and Lewis Rudin; small businessmen like Mitchell Levey, the owner of Whitey's Hardware on West 32d Street, and clergymen like the Rev. Norman Catir, an Epsicopal rector - all demanding in one voice that the city stop placing homeless families in the hotels. ''The city has created a double-pronged problem here,'' said Mr. Catir, rector of the historic Church of the Transfiguration at East 29th Street and Fifth Avenue. ''These large families crammed into small hotel rooms - they were the first victims. But now the neighborhood has become the second.''