As the chart on this page shows, the Johnston, Lemon & Co. index of 30 area blue chips suffered an unaccustomed beating in the first quarter. It fell 12.16 percent compared with a decline of 6.32 percent of the Dow Jones barometer of 30 national blue chips and a 5.42 percent decline in the Standard & Poor's index of 500 stocks.

"Many stocks in the JL index are currently selling at the low end of their 1979-80 price range, leading increasingly strength to the possibility that investors have, to a large extent, already discounted the effects of a recession," said JL analyst Ben White in reviewing the results.

Indeed, local and national stocks recovered last week, mainly because some investment advisors pointed out hugh bargains that existed at a time when interest rates on other investments have declined sharply.

The Johnston, Lemon index rose smartly to 102.264 after falling the previous week to 100.167. After plummeting to a two-year low early in the week, the Dow Jones industrials burst forward by 40.18 points for the week as a whole and closed at 803.58. Many analysts believe that a certain decline in corporate profits and dividends is bound to make it difficult for the Dow to stay above 800 for a long time, since it measures only a small number of major industries. Broader market indicators may show more strength, but a strong test of the 800-level Dow will begin today.

Not all firms are headed for reduced dividends: Fairchild Industries directors last week authorized a 100 percent stock dividend on May 28 (owners of record May 7), Giant Food's payout will rise to 27.5 cents a share from 25 cents quarterly June 13 (record date May 16), Chessie System goes to 64 cents from 58 cents on June 2 (record date May 19), Overnite Transportation to 35 cents from 31 cents on June 16 (record date June 2) and Hechinger Co., criticized in the past by some owners for sluggish payouts, declared a 20 percent stock dividend May 30 (owners of record May 9).