LEAD: Acting swiftly in the face of a divisive debate on the abortion issue, President Bush announced today that he would nominate David H. Souter, a 50-year-old Federal appeals court judge, to the Supreme Court.

NO 'LITMUS TEST,' PRESIDENT SAYS

LEAD: Sometimes President Bush does the bold and unexpected, as he did when he chose Dan Quayle as his running mate in 1988. But more often he is cautious, and that was his mode today in the nomination of Judge David H. Souter of New Hampshire to the Supreme Court.

Bush's Move: Caution Wins

LEAD: A sharp fall in stock prices yesterday reflected growing worries over the health of the economy, especially the erosion of corporate profits, as well as a stock market that has grown increasingly fragile, some traders and analysts say.

Market Place;   Wall St. Volatility Reflects Larger Economic Worries

LEAD: Hamburgers, student loans and lingering doubts about Alan Greenspan's intentions on interest rates touched off a major stock market slide yesterday.

Dow Drops 56.44 After Big Selloff

LEAD: Frank Calamari was hired to provide security while the Westhelp housing for the homeless was being built in Mount Vernon in 1989 and for the Westhelp complex now under construction in Greenburgh. The Mount Vernon neighborhood is a working-class-to-poor area, mainly black. There are vacant lots, boarded-up houses, drug dealers nearby.

Our Towns;   The Homeless Head for Suburb And Suits Follow

LEAD: As part of a plan to maintain racial and ethnic balance at the Starrett City housing complex in southeast Brooklyn, the owners are considering making apartments available to Soviet Jews who come to the United States. Critics say that would circumvent a United States Supreme Court decision that found Starrett had discriminated against black and Hispanic families on its waiting list.

Brooklyn Landlord, To Keep Racial Mix, Looks to Soviet Jews

LEAD:  Health Policy Is Outlined       The Health Secretary denounced calls for a radical revamping of the health-care system, but said ways were being sought to protect those lacking insurance. Page A10.       Forging a New Poland       Poland's chances for prosperity rest with people like Zygmunt Borek, a private manager hired to transform a huge state-run steel mill.

INSIDE

LEAD: Public School 28 and Public School 309 are a 10-block walk from each other in the same frayed and indigent Bedford-Stuyvesant neighborhood in Brooklyn, but in some ways, they are miles apart.

How 2 Schools So Alike Can Be So Different

LEAD: David J. Herman, the new chief executive of Saab Automobile A.B., faces more than the usual challenge in trying to turn a loss-ridden auto maker into one that can flourish in a crowded luxury car market.

G.M. Goal: Restore Saab's Luster

LEAD: The New York City Health Commissioner denounced his department yesterday for ''outrageous insensitivity'' and ''betrayal of the public trust'' for allowing thousands of cancer tests on poor women to languish unread for up to a year in a city laboratory.

Health Chief Denounces Agency Over Mishandling of Pap Tests

LEAD: IN the annals of entomological villainy, few insects are as despised, as feared and as meticulously investigated as the tiny imported fire ant, which attacks humans, animals, plants, other insects and even electrical devices.

Mighty Fire Ants March Out of the South

BUSINESS DIGEST

LEAD: Talks began yesterday to put together a plan for Northwest Airlines to buy a large part of Eastern Airlines while overseeing the liquidation of the rest of its assets for Eastern's unsecured creditors, people close to the negotiations said.

Northwest Seeking Deal For Eastern

LEAD: In a move that is rare among utilities, the Kansas City Power and Light Company made a hostile tender offer yesterday for the shares of a neighboring utility, the Kansas Gas and Electric Company. Kansas City Power said the bid was worth $857 million.

In Rarity, Utility Seeks Another in Midwest

LEAD: The Bush Administration's ban on military assault-style weapons, criticized as a tepid response to drug-related violence when it took effect last year, has been weakened by a provision that allows redesigned versions of the weapons to be imported.

Altered Models Of Assault Guns Elude U.S. Ban

LEAD: A HIGHLY sensitive Soviet-American detector operating deep in a mine in the Caucasus region since the first of the year has failed to find any of the ghostly solar particles it sought, but scientists are more excited than disappointed.

A Solar Particle That Wasn't There Offers Enticing Clues to the Cosmos

LEAD: THOUSANDS of people moved to this boulder-strewn meadow between the eighth and first centuries B.C. partly because of its proximity to trade routes. But the Biblical town of Maresha had another attraction, too: as much as anything else, it flourished because of its caves, hundreds of elaborate caverns forming an underground city that generations of dwellers carved out of the soft limestone just a foot or two beneath the surface.

Judean Cave City Yields Trove of Ancient Secrets

LEAD: The $1.3 billion deal by the French hotel and restaurant company Accor S.A. to purchase Motel 6, the Dallas-based chain of economy motels, may be the boldest move yet by two executives already known for their boldness and management skills.

Accor Is Gambling on U.S. Motels

LEAD: Two years after he helped buy an insolvent Oklahoma bank from Federal regulators, a former aide to George Bush invested $100,000 with a Federal official involved in negotiating the bank deal, according to public records and participants in the deal.

INVESTMENT LINKS FORMER BUSH AIDE TO F.D.I.C. OFFICIAL

LEAD: The RJR Nabisco Holdings Corporation, the parent of the tobacco-and-food giant that recently refinanced part of history's largest leveraged buyout, yesterday announced a loss of $108 million for the second quarter, compared with a loss of $319 million in the comparable period last year. The improved performance exceeded analysts' expectations.

  RJR Nabisco's Parent Posts $108 Million Loss for Quarter

LEAD: Miguel Antonio Bernal, a respected Panamanian scholar and social critic, was eating dinner with friends recently in a restaurant when his companions noticed a man they recognized as their torturer during their detention under Manuel Antonio Noriega.

Noriega's Troops Now Form Police With U.S. Aid, Panamanians Say

LEAD: In the 22 years since he left private law practice to work as a government lawyer, David H. Souter, President Bush's Supreme Court nominee, has not given a speech, written a law review article or, as far as anyone knows, taken a position on the correctness of the Supreme Court's precedents on abortion or any other issue.

  An 'Intellectual Mind': David Hackett Souter

LEAD: A New York City police detective testified yesterday that he tricked one of the defendants in the Central Park jogger trial into confessing.

Detective Says He Tricked Jogger Suspect

LEAD: Millions of gallons of raw sewage continued to flow into New York's rivers yesterday as engineers struggled to restart a giant pump needed to process all the waste received by the city's second-largest treatment plant.

Engineers Battle to Restart Pump to Halt Sewage Flow

LEAD: Three highway workers were killed this morning when a flatbed truck rammed into two parked construction vehicles and a group of workers on the shoulder of southbound Interstate 95. The truck crossed into the right lane of the three-lane highway just after it had been closed so workers from AMI Industries of Meriden could repair guard rails, a state police spokesman said.

July 24, 1990

Headlines from July 24, 1990

NO 'LITMUS TEST,' PRESIDENT SAYS

Bush's Move: Caution Wins

Market Place; Wall St. Volatility Reflects Larger Economic Worries

Dow Drops 56.44 After Big Selloff

Our Towns; The Homeless Head for Suburb And Suits Follow

Billboard 200

Please Hammer Don't Hurt 'Em

I'm Breathless: Music From And Inspired By The Film Dick Tracy (Soundtrack)

Step By Step

Wilson Phillips

Pretty Woman

Historical Context for July 24, 1990