Apple's outlook, smartwatch uncertainty a drag on its shares, Nasdaq

When Apple sneezes, the tech-heavy Nasdaq catches a cold. Sniffling from Microsoft and Yahoo probably aren't helping either.

The Nasdaq tumbled almost 8 percent before markets opened Wednesday after the three companies posted earnings that gave Wall Street reason to pause. Much of the focus was on Apple, however, which rarely disappoints.

In addition to doubts over sales of Apple's long-awaited watch, the company's revenue projections for the current quarter cast a pall over the tech giant before the opening bell and its shares slumped 7 percent.

Apple Inc. dropped some hints that its smartwatch may not be selling as fast as some had expected. Analysts noted that Apple reported $2.6 billion in revenue from its "Other Products" segment, which includes the watch among other things. That's about $952 million more than the previous quarter, when the watch had not yet gone on sale, or significantly less than the $1.8 billion in watch sales that analysts surveyed by FactSet were expecting.

But Chief Financial Officer Luca Maestri told The Associated Press that revenue from the watch amounted to "well over" that $952 million increase. He said watch sales were offset by declining revenue from iPods and accessories, which are also lumped into that segment.

Brian White of Cantor Fitzgerald is keeping a "buy" rating on Apple, saying that the company is in the middle of a "transformational, super cycle" given the recent launch of the smartwatch, momentum in China and its rapidly expanding digital forays, such as Apple Music and Apple Pay.

"We believe Apple's future prospects have never been brighter," White wrote.

White is not alone, with many analyst raising their expectations for Apple.

However, the technology sector has been on an extended run, setting record after record. It hit another all-time high Monday.

Anything less than stellar earns may be enough for investors who are trying to time the top of the market.

Microsoft Corp. booked an $8.4 billion charge related to the write-off of the Nokia phone business it bought just over a year ago. It contributed to the company's largest loss ever. While its fourth-quarter results topped Wall Street's view, the company also reported a steep decline in personal computer sales even as it prepares to launch its latest operating system, Windows 10.

Yahoo Inc. posted a second-quarter loss, with net revenue unchanged from the prior-year period.

The Nasdaq is still leading all major U.S. markets higher, up 10 percent for the year. It's fallen this week, though not as much as the Dow or the S&P 500.

Investors won't need to wait very long for the next heavy hitter on Nasdaq to post earns. Amazon.com is up Thursday after the markets close.