As soon as Steve Stone had leaped from the pitcher's mound, fired his fist above his head and was engulfed by Baltimore teammates, the public address system in Yankee Stadium began playing the sweetly said crooning of vintage Frank Sinatra.

"I wanna wake up in the town that never sleeps . . . New York, New York," sang very old Blue Eyes. "I want to lose these little-town blues."

Not too many New York Yankees fans will sleep well after tonight's second straight loss to the Orioles, this time 4-2, thanks to eighth-inning, fireworks and Stone's seven-hitter. The Yankees definitely have the blues.

The Orioles left this game with heroes, reinforced confidence and a suddenly slim deficit of 3 1/2 games in the American League East. And with a hugely sufficient 55 games to go.

The Yankees, who now have lost 11 of 21 while the Birds are on a 12-of-13 binge, were left with a plethora of bitter second-guesses and a severe case of the bad breaks.

The star of this night clearly was Stone, who gave up a 425-foot, two-run homer to the third batter he faced, Oscar Gamble, then shut out the Yanks with a sweaty, gutty 136-pitch effort that got better as it progressed.

"We always start with pitching," explained the Orioles' Terry Crowley. "That gives us world's of time to build a winning rally. Stone just battled and battled, and we finally broke through."

"That was not the guttiest game of my career," said Stone, exhausted, but wry. 'I was once hit in both legs by line drives when I was at Kent State and I finished the game."

The Birds' rally for their seventh straigt victory came in two stages. In the third, Al Bumbry hit the left field foul pole with a slicing liner for his fifth homer after Rick Dempsey led off with a double. That tied the game, 2-2, against Yank starter and loser Tom Underwood.

"Jesus, last night it's bloop hits and tonight they hit the foul pole," said the Yankees' rookie manager, Dick Howser, who returned to the dugout after missing two games with an intestinal virus. Howser still looked as emaciated as his team's once-robust 11-game lead.

Howser didn't need to feel any sicker, but undoubtedly did after two extremely dubious late-inning decisions that probably cost the Yanks this game.

With one out in the eighth, Rich Dauer double, extending his hitting streak to 11 games, in which he has batted .375.

What were the Yankees to do with switch-hitters Ken Singleton and Eddie Murray due to bat? Bring in Rich Gossage?

"That's a good question," said Oriole Manager Earl Weaver, chuckling and obviously pleased that Howser stayed with Underwood.

This after 106 pitches on a humid night for Underwood, who has finished just one of 20 starts this year. Compounding the tactical felony was the fact that even if Underwood retired Singleton, that would merely earn him the right to face Murray.

But Underwood never got to Murray. Singleton saw to that, pounding a shoulder-high nothing ball off the top of the seven-foot high wall in right center at the 385-foot sign.

Reggie Jackson got his glove on the ball but couldn't hold it. A golden glove might have fared better.

Singleton made third with what proved to be a game-winning RBI triple 1.

Then, with the horse out of the barn, Gossage was summoned, and for the second night was roughly treated by Baltimore's platoon of lefty pinch hitter. This time, after Murray grounded out, Crowley smoked a liner past Gossage into center field, the bull outbound at a far higher rate of speed than the 100 mph the Goose had sent it plateward.

That insurance RBI by Crowley haunted the Yankees in the bottom of the inning when Ruppert Jones, the defensive goat Friday night for having allowed the game-winning bloop to full in front of him, made one of the most blank-brained base-running moves of any pennant race.

On first with two out, Jones became brave when Murray did not hold him to the bag. Possibly thinking of two previous successful steals, he could not resist trying for a third, despite the fact that it violated every can-on for a team that is two runs down and has its best pinch-hitter, in this case Bob Watson, at the plate.

Jones was gunned down, by a whisker, by Dempsey to end the inning. Jones looked like he wanted to pull second base out of the ground and crawl under it, and he should have.

"What in the world did Rup say? Weaver asked curiously. "He couldn't have been thinking.

"For that matter, what did Watson say? That burned his turn at bat. He had to come out of the game. In fact, did anybody ask Watson why he wasn't in (the game) in the first place?" Weaver asked with mischevious malice. "That may be the story," he added with one of his famous snicker-snorts.

Not when Waston is unavailable for comment.

Howser, however, was left with the painful reminder of the performance of his No. 5 hitter, first baseman Jim Spencer, the man batting the spot where the .310-hitting Watson usually resides.

Spencer was zero for four tonight, stranded six runners and looked particularly pained because the O's walked Reggie Jackson three times just to get to him.

"We haven't played as well without Craig Nettles," Howser admitted, mourning the absence of his third baseman who is out for another month with hepatitis. "They've all been pitching around Reggie . . . frustrating him . . . then getting out the fifth and sixth hitters. We expect Jim (Spencer) to snap out of it any minute."

When first place hangs on Jim Spencer's bat, that is a slender thread. He has six gold gloves but no silver bats.

The O's tried to downplay this win, even though in their final game of '80 in hostile Yankee Stadium Sunday, they have a chance for a numbering sweep when Mike Flanagan faces Tommy John. Only Weaver couldn't not help bristling.

"Just two weeks ago, some radio jerk in Minnesota was trying to get me to comment on how it felt to be 10 games out of first place and out of the race," Weaver said. "I kept telling him we weren't out of anything."