NEW YORK, (Reuters) - If Wells Fargo's strong first-quarter preliminary performance is any sign, stocks could rally further this week on any reassuring news when three other big banks post quarterly results.

The earnings season starts in earnest, with banks Goldman Sachs, JPMorgan and Citigroup set to report their latest scorecards. Both JPMorgan and Citigroup are Dow components.

General Electric, another Dow component, will report earnings on Friday. GE, whose businesses range from broadcasting to making jet engines, is closely watched because its results and outlook may shed light on the broader economy's health.

Hopes that the economic slump may be abating and some stability may be returning in the banking sector have helped underpin a month-long recovery in stocks from 12-year closing lows hit in early March.

"The market is looking like it wants to continue the rally," said Andre Weisbrod, president and chief executive officer of STAAR Financial Advisors Inc in Pittsburg, Pennsylvania.

"But again, so much of this depends on the news of the day. It looks like we're going to see the banks showing some improved cash flows, and that's certainly better than the opposite situation."

The benchmark Standard & Poor's 500 Index (.SPX) scored its fifth straight weekly gain at Thursday's close, when trading ended for the short holiday week. On Thursday alone, both the S&P and the Nasdaq jumped almost four percent, while the Dow industrials climbed three percent.

The latest rally was triggered by Wells Fargo, the fourth-largest US bank, which surprised Wall Street by saying it expected to post a record $3 billion profit for the January through March quarter. Wells Fargo will report earnings on April 22.

Investors are hoping that more banks will sing the same positive tune when their results roll in.

Goldman Sachs Group Inc, which will report earnings tomorrow, converted from an investment bank to bank holding company status last September after Lehman Brothers collapsed.

On Good Friday, Goldman Sachs was said to be considering a multibillion-dollar stock offering to help repay money borrowed from the US government, according to the Wall Street Journal.

Looking ahead, JPMorgan is due to report results on Thursday and Citigroup on Friday.

President Barack Obama said on Friday that despite the recession's heavy toll, the US economy is showing "glimmers of hope." He didn't mention the "stress tests" being performed at 19 big US banks. The financial markets anxiously await those results, due at the end of April.

But the president expressed confidence that his administration was addressing the problems of both troubled banks and non-bank financial institutions. US financial markets were closed for Good Friday.

For the short holiday week, the S&P 500 rose 1.7 percent, the Dow Jones industrial average gained 0.8 percent and the Nasdaq composite index climbed 1.9 percent.

For the year, the Nasdaq is up 4.8 percent, while the Dow is down 7.9 percent and the S&P 500 is down 5.2 percent.

The banking sector's health has been a major worry after fallout from the financial crisis led the US government to pump billions of dollars into such troubled institutions as Citigroup, which gave Wall Street a surprise last month when it said it was profitable in January and February.

With the economy mired in a protracted recession, investors are eager to see if banks have begun lending again to consumers and businesses, whose spending would serve as a crucial underpinning to an economic recovery.

"The banking sector has been in focus for Wall Street for the last six months, so next week sharpens that a little bit more," said Paul Nolte, director of investments at Hinsdale Associates in Hinsdale, Illinois.

On Friday, the Federal Deposit Insurance Corporation said US regulators closed Cape Fear Bank of Wilmington, North Carolina, and New Frontier Bank of Greeley, Colorado, which became the 22nd and 23rd US banks to fail this year.

Investors may need to keep the eyedrops handy this week as they sift through torrents of earnings reports and some major US economic indicators for March, including the Producer Price Index, the Consumer Price Index and housing starts.

Besides bank earnings, earnings are expected from other bellwethers, particularly in the tech sector, which was mostly spared most of the pain in the market's recent fall to 12-year lows.

Chip maker Intel Corp is set to report first-quarter earnings tomorrow, while Google Inc, the web search leader, reports results on Thursday — both after the bell.