Updated from March 6 to correct first name of American Eagle CEO.

NEW YORK ( TheStreet) -- Wasn't all this trouble with Greece supposed to be sorted?

The major U.S. equity indices finally suffered through a good old-fashioned sell-off on Tuesday, the first one of 2012. The reasons behind the rush for the exits again were rather vague. A recession for Europe has long been in the mix for market prognosticators, and the idea that everything was going to go smoothly with Greece when nothing has since the country entered this bailout phase was pure fantasy.

What's more interesting is that the bulls blinked for the first time since this rally began in earnest. Wednesday's session could shape up to be a real test, and at least one trading veteran thinks more pain lies ahead.

" Be aware that the sellers are just now grouping, and they are frantic to figure out what's causing the real weakness, but in the end they will just sell first and ask questions later, because the charts are broken and the money's not flowing in," wrote Jim Cramer in commentary earlier Tuesday.

It's a fair point. There have been plenty of calls for a pullback in the past few weeks, but few of them were based on any fundamental concerns. It was more that stocks had come up so far so quickly that a stretch of polite selling would appreciated, if only to appease the chart watchers.

Now, all of a sudden, the landscape looks shaky. What if Greece really does default? Will higher gasoline prices knock the economy for a loop? How much higher can Apple ( AAPL) reasonably be expected to run in the near-term? Will the banks be sideswiped by the stress tests? And on and on.

The thing is, when sentiment turns, there always a few ready-made reasons floating around to be nervous. And those negatives can seem downright ominous when the choice is between riding things out when the trading screen is literally drenched in red (decliners outnumbered advances 10 to 1 on the New York Stock Exchange on Tuesday, the ratio was more than 5 to 1 on the Nasdaq) and taking the profits you already have.

As for Wednesday's scheduled news, Apple's big day finally arrives with its latest product launch event out in sunny California. The stock is lagging ahead of the fanfare, which is expected to include the next version of the iPad, along with a host of nifty new features, and possibly Apple TV. Apple shares finished Tuesday at $530.26, off 2.7% this week. Not exactly a freefall.

Given the recent rally to all-time highs, a 'sell the news' reaction seems more likely than anything else though, likely leaving the start of the stock's next winning streak for another day.

On the earnings front, American Eagle Outfitters ( AEO) is slated to report its fiscal fourth-quarter results before the opening bell. The average estimate of analysts polled by Thomson Reuters is for a profit of 35 cents a share in the January-ended period on revenue of $1.04 billion.

Shares of the Pittsburgh, Pa.-based young people's fashion apparel and accessories retailer are flat in the past year and down nearly 4% so far in 2012 based on Tuesday's close at $14.06. That level is at the high end of the stock's recent range though, above both its 50-day and 200-day moving averages of $14.04 and $13.20 respectively.

That signals some anticipation ahead of this report despite the company's lowered outlook on Jan. 5 when it forecast earnings of 33 to 35 cents a share for the quarter, down from a prior projection for a profit of 40 to 45 cents a share.

The sell side is mostly on the sidelines though with 18 of the 29 analysts covering American Eagle at either hold (16) or underperform (2). The median price target of $16 implies potential upside of 12% from current levels, and the stock trades at a forward price-to-earnings multiple of 13.8X vs. 15.4X for rival Aeropostale ( ARO), which is due to report its quarterly results on Thursday.

Brean Murray previewed American Eagle's report on Tuesday, reducing its full-year earnings estimate to 95 cents a share from $1 per share and saying the latest results aren't nearly as important as what the changes the company plans to make to improve over the long haul.

"Frankly, the results from 4Q and any near-term guidance from the company on the conference call are somewhat irrelevant; the key will be the initial pronouncements and plan from new CEO Robert Hanson," wrote the firm, which reiterated a hold rating on the stock. "We would expect a focus on store productivity, pruning back locations, and potential shifts in key category penetration."

Citing a drag from January clearance sales, Brean Murray is expecting earnings of 32 cents a share from American Eagle, 3 cents below the consensus view. "We believe comps remained decent, but margins were further challenged due to unseasonably warm weather; we believe the company continued to have to aggressively clear inventory overages after a tough Xmas season," the firm said.

Check out TheStreet's quote page for American Eagle for year-to-date share performance, analyst ratings, earnings estimates and much more.

Ciena ( CIEN) is also due to open its books before the open, and Wall Street is looking for a loss of 5 cents a share in the optical networker's fiscal first quarter on revenue of $417.2 million.

Shares of Linthicum, Md.-based Ciena are up 20% so far in 2012, but that surge still leaves them down more than 45% in the past year along with sector mates like Finisar ( FNSR), off 53%; and JDS Uniphase ( JDSU), lower by 49%. The group continues to wait for a washout as every time business conditions start to improve, a setback seems to follow shortly after.

Finisar gave a weak outlook last week, so there should be some bad news priced in, especially after Tuesday's broad sell-off that pushed Ciena's stock down 2.6% to close at $13.44. Also worth noting is that Ciena has a pretty volatile track record vs. analyst expectations. The company has missed in three of the past five quarters, including reporting a profit of 3 cents a share last time around when the consensus was for earnings of 6 cents.

Those same analysts are pretty bullish right now though with 18 of the 26 ratings on the stock either strong buy (9) or buy (9), and the 12-month price target at $17.

Check out TheStreet's quote page for Ciena for year-to-date share performance, analyst ratings, earnings estimates and much more.

Other companies reporting before the open include BankAtlantic Bancorp ( BBX), Bon-Ton Stores ( BONT) Brown-Forman ( BF.B), Canadian Solar ( CSIQ), Children's Place ( PLCE), Express Inc. ( EXPR), Fresh Market ( TFM), Hovnanian Enterprises ( HOV), Maidenform Brands ( MFB), Superconductor Technologies ( SCON), and Verso Paper ( VRS).

The late roster features Alamo Group ( ALG), Coca-Cola Bottling ( COKE), Coldwater Creek ( CWTR), H&R Block ( HRB), Heelys ( HLYS), Hot Topic ( HOTT), Jamba ( JMBA), Korn/Ferry International ( KFY), Men's Wearhouse ( MW), Pall Corp. ( PLL), Sequenom ( SQNM).

Wednesday's economic calendar features the Mortgage Bankers Association's weekly application activity index at 7 a.m. ET; the ADP employment change report for February at 8:15 a.m. ET; the revised reads on productivity and unit labor costs for the fourth quarter at 8:30 a.m. ET; weekly crude inventories at 10:30 a.m. ET; and consumer credit for January at 2:00 p.m. ET.

The ADP report should get the most attention ahead of Friday's February employment change report, and the consensus is for an increase of 218,000. Ian Shepherdson, chief U.S. economist at High Frequency Economics, said a 200K reading from ADP would likely translate to a rise of close to 250,000 in non-farm payrolls on Friday.

And finally, Tuesday must feel like one of those days the music died they sing about for investors in Pandora ( P), which dropped more than 20% in heavy after-hours action after the streaming music company surprised Wall Street with a wider than expected loss.

The company also dashed hopes that it would be profitable in the current fiscal year, forecasting a non-GAAP loss of 11 to 16 cents a share on revenue of $410 million to $420 million. The current average estimate of analysts polled by Thomson Reuters is for earnings of a penny per share on revenue of $418.3 million.

The stock was last quoted at $11.14, down 22%, on volume of more than 3 million, according to Nasdaq.com. At that level, the shares are trading 30% below their mid-June IPO pricing at $16 per share.

The winner in extended trades was Discovery Laboratories ( P), which soared on news that it's received marketing approval for Surfaxin, a preventive treatment of respiratory distress syndrome in high-risk premature infants.

Discovery Labs, whose stock hit a new 52-week high of $4.57 in Tuesday's regular session, expects to be able to make the drug commercially available in the United States later this year. The shares soared as high as $6.85 in late trades, and were last quoted up more than 35% at $5.14 on volume of 2.4 million.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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