February 2, 1988

LEAD: For an entertainment company with an extraordinary mystique, MCA Inc. has been performing mundanely of late.

LEAD: Toxic Waste Settlement

LEAD: Mayor Koch, saying New York City's fiscal condition was poised in the middle ground ''between the high slopes and the valley,'' proposed a $24.9 billion spending plan yesterday that calls for increased taxes and substantial cuts in services to close what he said would be a $758 million budget gap.

LEAD: Georgi M. Malenkov, who was a leading political figure in the Soviet Union after the death of Stalin but who was ousted in a Kremlin power struggle and sent into political oblivion, died last month, a Soviet official said yesterday. He was 86 years old. Malenkov was Prime Minister for two years and, for a short time, head of the Communist Party.

LEAD: A Queens grand jury has found no basis for criminal charges against two police officers who fired 11 shots in killing a man who the police said was lunging at one of the officers with a knife.

LEAD: Laurie Recht says she is 4 feet, 10 1/2 inches tall, though she wears her hair teased up, so this may be a slight exaggeration. She is 34, has lived on her own since she was 18, working as a secretary. She's the kind of person who, before going shopping Sunday, peeked into her apartment building rec room and asked if anybody needed anything.

LEAD: A LABORATORY at the National Institutes of Health has been turned into a maximum-security prison, with a full complement of locks and bars as well as deadly traps set to destroy any escapees. Pity the unlucky mouse who decides to make a break for it.

LEAD: Millions of Super Bowl television viewers learned on Sunday that Shearson Lehman Hutton would not engage in program trading for its own account. Similarly, several other brokerage firms, including Merrill Lynch, seem to be courting investors by sending the same message through newspaper ads these days.

LEAD: Companies

LEAD: Vice President Bush's televised quarrel with Dan Rather neither helped nor hurt his image, a New York Times Poll has found, but the persistent controversy over his role in the Iran-contra affair appears to pose a long-term threat to his credibility.

LEAD: Senator Daniel K. Inouye, who may be in line to become the next Senate majority leader, acknowledged today that he had made ''an error in judgment'' in pushing a pet measure through Congress as it rushed to adjournment last year.

LEAD: Members of the New York City Board of Estimate yesterday angrily rejected the idea that the powerful board was endangered because any effort to restructure it was likely to violate the Federal Voting Rights Act.