High-tech giant Hewlett Packard announced plans to buy rival Compaq Computer Corp. for about $25 billion in a mega-merger likely to shake up their industry. Both the Palo Alto, Calif.-based HP and Houston-based Compaq have been hurt recently by the downturn in the technology sector, and each has laid off thousands of workers. Another 15,000 jobs will be cut due to the merger, reports said. If the deal is approved by shareholders and regulators, it will push the company to No. 1 in personal computer sales worldwide. European antitrust regulators warned they'd examine the merger intensively, however.

Manufacturing activity declined for the 13th consecutive month in August, but at a significantly slower rate, the National Association of Purchasing Management announced. The index of business activity - at 47.9 - was much better than the 44.0 analysts had been expecting, and a rise from July's 43.6 index. Any figure below 50 signifies a decline in manufacturing. Stock prices jumped at the news. In another report, the Commerce Department said construction spending fell by 0.1 percent in July.

Ex-Attorney General Janet Reno declared herself a candidate for governor of Florida, a move that could lead to a high-profile race against President Bush's brother, Jeb. Reno opened a fundraising account, formally kicking off her bid for the Democratic nomination next year. The account will allow her to raise money and hire a campaign staff. Recent polls have indicated she could easily win the primary but that she lags behind Bush (R), who has said he will seek reelection. (Story, page 4.)

Sen. Phil Gramm (R) of Texas will not seek reelection next year, reports said. Gramm, who was expected to announce the decision in Washington, would be the second Republican senator in two months to announce his retirement, joining Jesse Helms of North Carolina. Sen. Strom Thurmond (R) of South Carolina also has said he'll retire. (Story, page 1.)

After weekend shark attacks that killed two swimmers and left another seriously injured, the Coast Guard launched aerial patrols of Virginia and North Carolina beaches. A Russian died and his woman companion was severely bitten by a shark in shallow waters near North Carolina's Outer Banks. The attack came two days after a boy died under identical circumstances at Virginia Beach, Va..

Ending a five-day standoff with the FBI, two men were fatally shot at a Vidalia, Mich., campground. Grover Crosslin, who owned the facility, was killed by an FBI agent at whom he allegedly pointed a rifle Monday. Crosslin's roommate, Rolland Rohm, also was killed when he didn't respond to requests to put down his weapon and pointed it at a police officer, authorities said. The standoff began when Crosslin started burning buildings on his property, which is the target of civil foreiture proceedings, and warning neighbors to leave. He had been facing felony drug and weapons charges, authorities said.

A free Labor Day night concert in Los Angeles turned into mayhem when a riot broke out. The punk-rock band System of a Down said it had planned the concert as a gift to its fans, but the group never had a chance to begin the show. Fire inspectors shut it down after deciding the crowd was too large, and angry fans stormed the stage, grabbing the musicians' gear and hurling pieces of it at the 160 police it took to disperse the crowd. No injuries were reported.

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