LEAD: THREE years ago Jean and Clarence Paul Petersen Jr., who had lived in a large house in Larchmont, N.Y., for almost 30 years, started thinking about their retirement. Their children were all married and they felt it was time to make some important changes.

Family Ties: Dream House for 2, With the Children Nearby

BUSINESS DIGEST: THURSDAY, JULY 2, 1987

LEAD: Many of the nation's leading law firms have had their most profitable year ever, fueled by a wave of corporate restructurings, the reaction of businesses to the new tax law and a jump in litigation.

BUSY LAW FIRMS' PROFITS LEAP

LEAD: Around this long-dry state today, Kansans with cocktail glasses uplifted were exorcising the ghost of Carry Nation, the fire-breathing temperance leader who put her stamp on the state's conscience and the slash of her ax on many a saloon.

KANSANS TAKE DRINK THEY BELIEVE SIGNALS AN ECONOMIC BOOM

LEAD: President Reagan announced today that he would nominate Judge Robert H. Bork to the United States Supreme Court, setting the stage for a bitter battle in the Senate over his confirmation.

REAGAN CITES HIS 'RESTRAINT'; CONFIRMATION FIGHT LOOMS

LEAD: For a part of the financial services industry with only a tiny fraction of the nation's deposits, ''non-bank banks'' have certainly created a ruckus.

LIMITED BANKS' GIANT HURDLE

LEAD: Judge Robert H. Bork is a multifaceted man with a powerful and restless intellect. He is a committed conservative who has accused the Supreme Court of usurping the powers of elected officials in dozens of decisions, including those Court decisions that protect abortion rights.

A MULTIFACETED CONSERVATIVE: ROBERT HERON BORK

LEAD: The JWT Group, which is being acquired by Britain's WPP Group, is losing some of its assignments from the Ford Motor Company, its largest client. Ford had said it would restudy its agency relationships if JWT's management changed.

FORD CUTS ACCOUNTS AT JWT

LEAD: At Public School 24 in the middle-class neighborhood of Riverdale in the Bronx, computers and special programs abound. The principal, David Rothstein, speaks enthusiastically of his teaching staff.

TWO BRONX SCHOOLS: STUDY IN INEQUALITY

LEAD: With an agreement on a new government code of ethics, Governor Cuomo has scored perhaps the biggest victory of his term in office. He took on the Legislature as he never had before, not just rejecting a code he considered weak but, in effect, shaming lawmakers into accepting one that was much stronger.

Governor Used His Popularity to Get Legislative Accord on Code of Ethics

LEAD: After 17 years of comfortably electing the same Congressman, the affluent Fourth Congressional District along Long Island Sound is facing a fractious contest in the heat of summer to choose a successor to Stewart B. McKinney.

7 IN CONNECTICUT VYING FOR A SEAT IN CONGRESS

LEAD: Lee A. Iacocca, chairman of the Chrysler Corporation, said today that the company had acted in a way that was ''dumb'' and ''unforgivable'' by selling cars that had been driven while their odometers were disconnected.

CHRYSLER ACTS IN FALSE MILEAGE CASE

LEAD: Most New York City consumers don't know a Guernsey from a Holstein (to say nothing of a Jersey) but they have probably figured out by now that something has been happening to the price of milk (thanks to a New Jersey dairy).

Price of Milk: The Changes Hit Close to Home

LEAD: A Federal judge threatened yesterday to hold the city of Yonkers in contempt and to impose severe daily fines if it failed to submit a housing integration plan by mid-July.

JUDGE WARNS YONKERS OF BIG FINES IF HOUSING INTEGRATION IS DELAYED

LEAD: Police Commissioner Benjamin Ward, in a highly unusual move, revealed yesterday that the New York City Police Department's intelligence division was conducting an undercover investigation of a group of self-proclaimed black revolutionaries he called the ''New York Eight.''

WARD DISCLOSES A SECRET INQUIRY ON BLACK GROUP

LEAD: The Nuclear Regulatory Commission voted 4 to 0 today to grant a full-power operating license to a nuclear reactor in upstate New York that took 14 years to complete and is the most costly in the industry's history.

U.S. GRANTS UPSTATE A-PLANT A LICENSE TO RUN AT FULL POWER

LEAD: STOOP-SITTING. It's a strange sight for a lot of people who live outside Brooklyn, which considers itself the world capital of this century-old tradition.

Brooklyn's Stoops Are Ringside Seats On Urban Drama

LEAD: The ruling and opposition parties began their separate campaigns today for future power, on a day when both sides spoke of a South Korean ''political miracle.''

2 PARTIES IN KOREA BEGIN CAMPAIGNING FOR FUTURE POWER

LEAD: The seven regional ''Baby Bell'' telephone companies have almost no chance of persuading Federal District Judge Harold H. Greene to allow them to expand vastly by providing long-distance service, and only a slim chance of winning permission to manufacture equipment, lawyers and other telecommuniciations specialists maintain.

'BABY BELL' EXPANSIONS ARE VIEWED AS UNLIKELY

LEAD: The chairman and the president of the Toshiba Corporation, whose subsidiary has been found guilty of illegal sales of high technology to the Soviet Union, resigned today.

2 LEADERS OF TOSHIBA RESIGN

INSIDE

LEAD: In an effort to bring pressure on Panama's military to allow democratic rule, the Reagan Administration has lashed out in the past 24 hours against the leadership of Gen. Manuel Antonio Noriega.

U.S. BERATES PANAMANIAN REGIME IN PRESSING FOR DEMOCRATIC RULE

LEAD: HERE it is summertime, and those signs of the season -the Mobil Travel Guide on the dashboard and the Ramada Inn Directory somewhere on the floor mats - herald that vast annual migration: the vacation excursion in the family automobile.

Vacationing by Car, Children in Tow

LEAD: Justice Francis X. Smith, who supervised 50 state judges in Queens, was convicted yesterday of perjury and criminal contempt for lying about what was said at private meetings on the awarding of cable television franchises.

JUDGE SMITH CONVICTED OF PERJURY IN QUEENS CABLE-TV INVESTIGATION

LEAD: A strike by unionized garbage collectors in northern New Jersey was averted early today after negotiators accepted an appeal by Governor Kean to continue contract talks.

KEAN'S APPEAL AVERTS JERSEY GARBAGE STRIKE

Esteban Félix Granero Molina is a Spanish former professional footballer. Known as El Pirata, he could play as a central or an attacking midfielder.

July 2, 1987

Headlines from July 2, 1987

Family Ties: Dream House for 2, With the Children Nearby

BUSINESS DIGEST: THURSDAY, JULY 2, 1987

BUSY LAW FIRMS' PROFITS LEAP

KANSANS TAKE DRINK THEY BELIEVE SIGNALS AN ECONOMIC BOOM

REAGAN CITES HIS 'RESTRAINT'; CONFIRMATION FIGHT LOOMS

Billboard 200

Whitney

The Joshua Tree

Girls; Girls; Girls

Whitesnake

Bad Animals

Notable Births

Historical Context for July 2, 1987