LEAD: The nation's economy grew at a 4.5 percent annual rate in the final three months of 1987, somewhat faster than the preliminary estimate a month ago, the Commerce Department said today.

Revision Lifts G.N.P.'s Rise To 4.5% Rate

LEAD: There are 4,000 homeless people in Westchester right now, and it is projected that by the time President Reagan leaves office there will be 6,000. Perhaps no suburban area has felt the turmoil of the President's dismantling of Federal low-income housing programs worse than Westchester. Robert M. Hayes, counsel of the National Coalition for the Homeless, calls

Our Towns; Neighborliness, The Homeless And Westchester

LEAD: Stock prices swung widely yesterday, with the Dow Jones industrial average ahead as many as 33 points before a late-session wave of selling pushed the Dow to a close of 2,017.57, down 22.38 points.

Late Selling Sends Dow Down 22.38, to 2,017.57

LEAD: Secretary of State George P. Shultz called on Israel today to make ''decisions of historic proportions'' to help change the status quo in the Middle East.

Shultz Urges 'Historic' Israeli Step To End Impasse Over Palestinians

LEAD: The Federal Reserve Board voted unanimouslytoday to permit the Bank of New York to proceed with its $1.08 billion takeover bid for the Irving Bank Corporation, provided it raises large amounts of new capital.

Fed Clears Bid by Bank of New York

LEAD: THIS is the season when the art world gets a jump on spring. At the Jewish Museum, Marc Chagall goes heels over head in his ''Homage to Gogol.'' At the New York Public Library, the red-vented bulbul sits high in a custard apple tree as part of the ''Bird Illustrated'' exhibition. At the Cordier & Ekstrom Gallery, on East 75th Street, Varujan Boghosian tells us the tale of a beautiful young woman with a mantilla of queen-sized butterflies.

Signs of Spring Erupt in Galleries And Museums

LEAD: To find the new Palestinian leadership that is said to be emerging from the protests in the occupied territories, Secretary of State George P. Shultz could look in places like this isolated village off a side road in the stony hills northwest of Nablus.

New Leaders in Arab Unrest: Radical and Loyal to P.L.O.

LEAD: New York City's Board of Education pays more for its custodial services than other major cities but receives less in return, according to a study released yesterday by a nonprofit group that monitors the public schools.

Salary Rate Of Custodians Is Criticized

LEAD: American families are better off than they were in 1970, largely because of the increase in two-worker families, but there are bigger income gaps between rich and poor, according to a major study issued today.

INCOME OF FAMILIES IS UP, WITH RICHEST BENEFITTING MOST

INSIDE

LEAD: It cost Cornelius Kelly $100 in cash to bail his best friend, Jerry Bugs, out of jail last week.

Village Scorns Spotlight of Brawley Case

LEAD: Severe price cutting and the market clutter created by many new products have slowed growth in the mini-supercomputer industry, which many analysts had thought could achieve $1 billion in sales in 1990. Although demand continues to rise and sales hit $300 million last year, these experts think the industry will not reach the $1 billion benchmark until 1992.

The Shrinking Supercomputer . . . Will Add to Turmoil in Industry

LEAD: Using a supercomputer has always been a little like flying on the Concorde: it may be fast, but traffic can still cause delays on the way to the airport. The lines of engineers and scientists waiting to get time on the company machine could shrink, however, with the arrival on the market of a new generation of small but extremely fast computers.

The Shrinking Supercomputer . . .

LEAD: For months before a Rikers Island jail erupted in violence last week, there were hints that tension was mounting, New York City jail officials said yesterday.

When Rikers I. Erupted: How the Tension Mounted

BUSINESS DIGEST: FRIDAY, FEBRUARY 26, 1988

LEAD: In a significant change in policy, the Federal Reserve Board has altered the way it monitors the economy, its vice chairman, Manuel H. Johnson, said today. The new approach will give the financial markets a better sense of where interest rates are heading.

Fed Alters Economic Monitoring

LEAD: After 72 summers of playing only daytime baseball at Wrigley Field, the Chicago Cubs were given permission by city officals today to install lights and schedule night games at home this season.

Sunset for a Baseball Tradition: They're Lighting Wrigley Field

LEAD: All 50,000 physicians in New York State would have to be re-examined to retain their licenses under a plan unanimously agreed on by a state medical panel formed by Governor Cuomo.

Panel Urges Retesting of All New York Physicians

LEAD: In Modigliani-esque repose, the likeness of W. C. Fields - in white gloves, cane, top hat, bow tie and absolutely nothing else -bore witness to the legislative proceedings yesterday.

Afterlife of the Famous: Heirs Warn of 'Poachers'

LEAD: A senior Soviet official indicated today that the Soviet Union might drop a key objection to the American development of a space-based missile defense system by permitting the testing of components in space.

Soviet Indicates Easing of Stand On 'Star Wars'

LEAD: THERE are those who worry about the future of classical music. But insofar as the string quartet, the core ensemble of such music, is concerned, their worries seem misplaced. On both sides of the Atlantic, composers are writing new quartets with beaverish glee and audiences are flocking to hear them.

A String Quartet Savors the New

LEAD: An antibiotic drug treatment has prevented the onset of a rare but deadly form of pneumonia that is the most common cause of death in AIDS patients, the authors of a new study reported today.

BIG GAIN REPORTED ON AIDS PNEUMONIA

WEEKENDER GUIDE

LEAD: Panama's civilian President announced yesterday the dismissal of Gen. Manuel Antonio Noriega, the country's principal leader, as commander of the Defense Forces.

SITUATION UNCLEAR

LEAD: The chief hand surgeon at the Bellevue Hospital Center testified yesterday that X-ray photographs of the broken bone in Robert E. Chambers Jr.'s right hand showed a ''classic picture of a wild swing of a forceful nature striking a hard object.''

February 26, 1988

Headlines from February 26, 1988

Revision Lifts G.N.P.'s Rise To 4.5% Rate

Our Towns; Neighborliness, The Homeless And Westchester

Late Selling Sends Dow Down 22.38, to 2,017.57

Shultz Urges 'Historic' Israeli Step To End Impasse Over Palestinians

Fed Clears Bid by Bank of New York

Billboard 200

Faith

Dirty Dancing

Kick

Tiffany

Bad

Historical Context for February 26, 1988