Place egg whites in a large bowl; let stand at room temperature for 30 minutes. Meanwhile, in another bowl, combine the flour, sugar, baking powder and salt. Whisk the egg yolks, water, oil and extract; add to dry ingredients. Beat until well blended.
Add cream of tartar to egg whites; beat on medium speed until stiff peaks form. Fold into batter. Remove a third of the batter to a small bowl; tint pink with red food coloring. Alternately spoon plain and pink batters into an ungreased 10-in. tube pan. Cut through batter with a knife to swirl.
Bake on the lowest oven rack at 325° for 60-70 minutes or until cake springs back when lightly touched. Immediately invert pan; cool completely, about 1 hour.
For frosting, in a small heavy saucepan, combine the sugar, egg whites, corn syrup, water and cream of tartar over low heat. With a hand mixer, beat on low speed for 1 minute. Continue beating on low over low heat until frosting reaches 160°, about 8-10 minutes. Pour into the bowl of a heavy-duty stand mixer; add extracts. Beat on high until frosting forms stiff peaks, about 7 minutes.
Run a knife around side and center tube of pan. Remove cake to a serving plate. Frost top and sides of cake. Add drops of food coloring to frosting at base of cake; with a spatula, blend color up toward top of cake. Sprinkle with candies if desired.