January 3, 1989

LEAD: Rebounding from the October 1987 stock market crash, the Dow Jones Industrial average climbed 11.8 percent last year to 2,168.57. Merger activity reached record levels and corporate profits soared. Articles on the outlook for the stock and bond markets, mergers and corporate profits begin on page D1, followed by full-year tables for the New York Stock Exchange, the American Stock Exchange and the Nasdaq national market system.

LEAD: In a pioneering program that is being closely watched in Congress, the state of Washington this week began providing medical insurance to working people who cannot afford it.

LEAD: The six-story apartment building at 241 West 113th Street, just west of Adam Clayton Powell Jr. Boulevard in Harlem, is the kind of abandoned ruin that marks all of New York City's poor neighborhoods.

LEAD: As they peered into the new year from the relative safety of the one just past, credit market analysts seemed to have a remarkably clear view of what is likely to unfold over the next six months. What happens afterward is in considerable dispute.

LEAD: AFTER a decade in the doldrums, grounded by budget cuts and the space shuttle accident, planetary exploration by the United States is primed for a big leap forward this year.