Updated from 1:09 p.m.

Citigroup

(C) - Get Citigroup Inc. Report

said on Friday that one of its subsidiaries has acquired

People's Bank's

(PBCT) - Get People's United Financial, Inc. Report

U. K. credit card operations in a deal worth about $526 million U.S. dollars.

The deal, which was struck by subsidiary

Citibank International

, included about $426 million in receivables, other assets and liabilities associated with the business. The Big Apple-based financial services company said the deal was made to strengthen its position in the U.K.

"This transaction represents a further step in our efforts to expand our consumer business globally, broadening our presence in the important U.K. marketplace," the company said in a statement. "The People's U.K. credit card business represents a significant increase to our own profitable and growing business in the U.K."

People's Bank warned that its first-quarter profit results will be sharply lower than expected, citing investment losses and bad loans as the principal causes. The Bridgeport, Conn.-based savings bank said that earnings would be in the neighborhood of 20 to 22 cents a share, which is less than half the 45 cents Wall Street analysts expected.

Citigroup closed down $2.25, or 5%, to $42.75; People's Bank closed down $1.31, or 5.2%, to $23.75.

Sycamore Networks

(SCMR)

warned investors Thursday that third-quarter results will be nothing short of disastrous, with a steep loss of sales contracts reversing an expected profit and revenue falling short of estimates by at least 60%.

Sycamore now expects to post a loss of 16 cents to 19 cents for the quarter ending April 28, on revenue of $50 million to $60 million. Analysts polled by

Thomson Financial/First Call

expected the Chelmsford, Mass., company to earn 5 cents a share on a pro forma basis on revenue of $152 million. In an admirable show of understatement, Sycamore attributed the shortfall to "lower-than-expected customer orders."

TheStreet.com

wrote a story

earlier. Sycamore closed down $1.81, or 20%, to $7.25.

Mergers, acquisitions and joint ventures

The

European Commission

issued a statement Friday stating that it has approved plans by Singapore-based

Flextronics International

( ERICY) to purchase

Ericsson's

( ERICY) handset operations.

Flextronics said that it plans to relocate most of Ericsson's phone production from Sweden to China and Malaysia in an attempt to defray costs.

After reviewing the case, the European Commission said there are "a number of very strong suppliers of electronic manufacturing services to original equipment manufacturers both worldwide and on a European level. This precluded the possibility that Flextronics could acquire a dominant position in the market."

Flextronics closed down $1.31, or 8.3%, to $14.50; Ericsson was down 25 cents, or 4.4%, to $5.44.

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Earnings/revenue reports and previews

Tellabs

( TLAB), a maker of electronic communications equipment, lowered its first-quarter guidance for the second time this quarter, citing a slowdown in communications spending as the cause. The Illinois-based Tellabs said it expects to post first-quarter earnings of 29 cents a share as compared with the previously reported 35 cents to 38 cents a share.

The company also said it now expects total sales of roughly $772 million first quarter compared with earlier forecasts of $830 to $865 million. Shares of Tellabs closed $7, or 17.2%, to $33.75.

Hyperion Solutions

( HYSL) said it will miss fiscal third-quarter results due to a slowing economy. The softwaremaker said it will report results in a range of a 4 cent loss to a 1 cent gain on revenues of $122 million to $127 million. The seven-broker consensus was for earnings of 7 cents a share. Hyperion closed down 50 cents, or 3.2%, to $15.38.

Nordstrom

(JWN) - Get Nordstrom, Inc. (JWN) Report

said same-store sales fell 1.1% in March. The stock closed down 19 cents, or 1.1%, to $16.62.

Broadband communications maker

Marvell Technology Group

( PDX) said it expects to fall short of earnings expectations due to the economic slowdown. The company said it should earn 4 cents a share for the first quarter, down from the three-analyst

Thomson Financial/First Call

consensus looking for 6 cents a share. Marvell closed down $1.06, or 11.9%, to $10.

Pediatrix Medical Group

( PDX), a maker of hospital neonatal and pediatric intensive care units, said it expects to beat estimates for the year and for the first quarter. It expects to earn $1.17 to $1.25 a share for the calendar year, including the impact of a proposed merger with

Magella Healthcare

, whereas the earlier three-broker estimate was for $1.13 a share for the year. The company expects to earn 20 cents to 22 cents a share. The Thomson Financial/First Call estimate is for 20 cents a share. Pediatrix closed up $1.56, or 6.9%, to $24.26.

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Analyst actions

Usually the only place lawyers, doctors, and bankers all get together is at some Westchester country club. So when their paths cross off the golf course, there is cause for worry. And today, there was a lot of worry about

Boston Scientific

(BSX) - Get Boston Scientific Corporation Report

.

Boston Scientific, a major producer of medical equipment, has had a strained relationship with one of its key suppliers, Israeli-based

Medinol

, for some time. Medinol supplies BS with stents, little wire-mesh devices that prop open arteries, and yesterday filed a lawsuit against BS charging that BS had in fact stolen the technology. Boston Scientific denied the allegations, and said it would continue to produce the stents, with no delay in production.

Well, Medinol is none too happy. And in fact, they haven't been on very good terms since BS tried to buy them out last year, but couldn't complete the deal. BS owns approximately 20% of Medinol.

The suit led to a halt in trading of the stock yesterday, and a slew of analyst actions today. The most pessimistic move was a harsh downgrade by

Prudential Securities

TheStreet Recommends

analyst Sandra Hollenhorst, who reduced the company to the rarely seen sell, from hold. Hollenhorst noted that poor visibility and a lack of guidance on the company's part led to her estimate reductions, and the allegations from Medinol only put "further pressure on the company's market share, particularly in the coronary stent market."

Hollenhorst reduced her price target to $10 from $18. The stock closed yesterday above $17; today, Boston Scientific closed down $2.18, or 12.6%, to $15.17.

Also reducing the stock's rating was

Goldman Sachs

analyst Lawrence Keusch, dropping the medical equipment maker to market perform from market outperform. Citing that "the stock should find a floor in the $15 range" -- below yesterday's closing price, he also wrote that "significant upside in BSX shares is likely to be limited."

Lehman Brothers

analyst David Gruber decided in the wake of the allegations to maintain his neutral rating on the company, as well has his $22 price target.

Robertson Stephens

left their long-term attractive rating on the stock. And just yesterday,

Dresdner Kleinwort Wasserstein

upgraded BS to buy from add.

In the wake of preannouncing a massive earnings shortfall yesterday,

Sycamore Networks

(SCMR)

felt the wrath of disappointed analysts this morning. The networking equipment manufacturer dropped a bomb after the market closed, warning that its current third-quarter EPS was likely to come in between a loss of 16 cents and 19 cents per share, while previous estimates expected a positive EPS of about the same magnitude. Whoops.

Robertson Stephens analyst Paul Johnson cut his rating to long-term attractive from buy this morning, saying that " We feel that Sycamore's situation is more precarious than many of the company's Optics peers due to its high customer concentration amidst the seemingly capital constrained carrier and enterprise environment." He also lowered his estimates.

Analysts at

J.P. Morgan Chase

,

Bank of America

,

Pacific Crest

and

Thomas Weisel

all downgraded Sycamore to market perform from their previous buy ratings. Lehman Brothers went to market perform from a strong buy call.

Salomon Smith Barney

, Dresdner Kleinwort Wasserstein, and

ABN Amro

all cut their ratings too.

Needless to say, opinion has shifted -- the analyst community doesn't want you to buy shares of Sycamore anymore.

Also jumping on the estimate reduction train were analysts from

Credit Suisse First Boston

and

WR Hambrecht

. As noted above, Sycamore closed down $1.81, or 20%, to $7.25.

Upgrades

Covance

(CVD)

: UP to strong buy from hold at Prudential Securities; price target: $19. Covance closed down 35 cents, or 2.7%, to $12.65.

Downgrades

Delano Technology Corp

(DTEC) - Get ALPS Disruptive Technologies ETF Report

: DOWN to market perform from long-term attractive at Robertson Stephens. Delano Tech closed down 66 cents, or 39.6%, to $1.

Initiations

DoubleClick

( DCLK): NEW market perform at Lehman Brothers. DoubleClick closed down 19 cents, or 1.6%, to $11.63.

Medtronic

(MDT) - Get Medtronic Plc (MDT) Report

: NEW long-term attractive at Robertson Stephens. Medtronic closed down $1.08, or 2.5%, to $42.51.

Elizabeth Arden

(RDEN)

: NEW buy at CSFB. The stock closed up $1.19, or 7.9%, to $16.19.

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Miscellany

Allegheny Energy

( AYE) announced that it has named Bruce Walenczyk (of

PSEG Energy

(PEG) - Get Public Service Enterprise Group Inc Report

fame) as its new chief financial officer. Walenczyk, a 28-year veteran of both the energy and finance businesses, will begin his post May 1. Allegheny Energy closed down 85 cents, or 1.8%, to $45.74.

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The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

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