Computer maker Hewlett Packard (HP) has launched a $1.6bn (£1bn) bid for data storage firm 3PAR, trumping a $1.2bn offer made by rival Dell last week.

Along with IBM, the two firms are looking into more profitable business areas outside of making computers.

The bids come as part of a glut of merger and acquisitions activity in the technology sector, including last week's $7.8bn bid for McAfee by Intel.

The HP bid pushed Wall Street higher in early trade, before shares lost ground.

Dell beat Wall Street sales and profit forecasts, and predicted a "pick-up" in demand from corporate customers.

The world's number three computer maker had revenues of $15.5bn (£10bn) in the second quarter, ahead of analysts' estimates of $15.2bn.

Dell's figures are closely watched, as spending on technology is a guide to the health of corporate America.

Demand for PCs would strengthen for the "next several" quarters as economic recovery continues, Dell said.

Diageo, the world's biggest drinks maker, saw pre-tax profits increase by 12% to £2.24bn in the year to the end of June.

The firm, whose brands include Guinness, Smirnoff and Johnnie Walker, said developing markets had offset weakness in western Europe and the US.

Exposure to a wide range of markets left it confident for future growth, it added.

Diageo's overall sales grew 5% to £9.9bn.

Like other brewers, the group's shares have been hit by significant rises in the price of wheat and barley.

But chief executive Paul Walsh told the BBC that Diageo had already fixed the prices it paid for many of its raw materials, so did not expect this to have a significant impact on profits, or to lead to price rises.

Job cuts

Diageo had been through a "year of challenges" where "the impact of the global economic crisis varied by market and the strength of the recovery appears to be equally variable," Mr Walsh said.