Wells Fargo ( WFC) kicked off an earnings-related rally on Thursday, and the market sentiment may have improved enough to build upon those gains next week.

Since the start of March, the Dow Jones Industrial Average, S&P 500 and Nasdaq have all soared more than 10% on signs that the economy and financial markets have begun to improve -- or at least not get worse. Wells Fargo on Thursday ended the holiday-shortened week by becoming the first major bank to follow through on earlier rosy statements, saying it expects to report $3 billion in first-quarter earnings in a preliminary earnings report.

Next week, major companies across the economic spectrum will report results, starting with CSX ( CSX), Goldman Sachs ( GS), Intel ( INTC) and Johnson & Johnson ( JNJ) on Tuesday, followed by American Airlines parent company AMR Corp. ( AMR) on Wednesday, Google ( GOOG), JPMorgan Chase ( JPM) and Southwest Airlines ( LUV) on Thursday and BB&T ( BBT) on Friday.

Steve Darden, wealth advisor at Williams Financial Advisors in Shreveport, La., is hoping that other banks also wrote down their assets far enough so that first-quarter results are not held back by unexpected charge-offs. But even if some miss expectations, Darden thinks the market rally will continue on through next week. He notes that even retailers that have been hard-hit by strained consumer spending have been issuing sunny forecasts recently, with six out of seven companies' predictions beating expectations.

"We sure tend to think that most of the bad news is priced in now," says Darden. "Things will have to be really, really bad next week for the market to respond negatively."

Still, while market sentiment has certainly turned from negative to positive, it's far from certain that a similar economic rebound is under way. Consumers still face a weak job market and high debt loads and have seen household wealth and home values drop immensely over the past year.

"While there are some signs of what Federal Reserve Chairman Ben Bernanke termed 'green shoots' of spring in the economic recovery, there are no definitive signs of recovery in either the banking crisis or the economic downturn," PNC Chief Investment Strategist E. William Stone said in a note this week. "Some economic data ... have turned less negative, which is certainly welcome, but some portion of this so-called 'recovery' is due to the fact that numerically it was difficult for the data to get much worse."

The Federal Reserve will release its Beige Book of commentary on the economic situation in each region of the economy on Wednesday, perhaps giving a better sense of how communities are faring. A retail sales report on Tuesday will also reveal whether consumers kept purse strings tight in March, and price-index reports on Tuesday and Wednesday will tell whether deflation fears earlier in the economic crisis were unwarranted.

Reports on building permits and housing starts on Thursday will also indicate whether a rebound of sorts in the housing market has led builders to believe inventories have leveled out far enough to start building once again. Those reports will come on the same day as the closely scrutinized weekly jobless report, which has remained elevated.

Bob Auer, portfolio manager of the Auer Growth Fund, predicts that M&A activity could play into the market rally as well, with several of the stocks he owns climbing in double-digit percentages as takeover rumors emerged over the past week. Companies that were waiting on improved conditions in the credit markets and the economy to seize upon deals may be eager to acquire other firms before market values climb too high.

Auer also says the market has started to shift from a technical mentality back to one based on fundamentals. He believes the bad news has been priced in for too long, and that the bulls will continue to run the stock market next week, playing up positive reports and outlooks over anything negative.

"The market is past the disappointments," says Auer. "If somebody keeps slapping you in the face and slapping you in the face, it's just another slap. But then if they praise you and give you a compliment, you really start to shine."

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