Earnings season is upon us and investors have been anticipating this news whether they like the numbers or not; markets and exchange traded funds (ETFs) are sure to respond accordingly. Financials are of particular interest after Wells Fargo’s preliminary earnings were released Thursday morning.

Earnings weakness for the first quarter is not expected to catapult the market, however, the anemic stock prices already reflect weak earnings. Does this mean weak earnings will kill the rally? The Big Picture reports that priced-in earnings weakness is more true at 6,500 than the Dow’s current 8,000 level.

Financials, in particular, are being watched closely. Investors are desperate for positive signs in the banking industry, say Stephen Bernard and Tim Paradis for the Associated Press. Positive earnings reports from the sector could indicate that the credit freeze could be starting to thaw.

Analysts are anticipating a 37% loss from one year ago, and all 10 groups in the S&P 500 show a year-over-year profit slide, a uniform decline that hasn’t happened in the 10 years Thomson Financial has been tracking such data, says David Gaffen for The Wall Street Journal. What many are listening for are the forecasts for the rest of 2009, the sentiment toward quarters two, three and four.

The biggest problem about that is who has the slightest idea about that far into the future in this market?

Earnings season is in full swing right now, and we’ve already seen a number of reports:

• Wells Fargo (WFC) reported that it expects a record $3 billion profit – far above analysts’ expectations; is this a sign of good things to come for the financial sector or just an anomaly?
• Alcoa (AA) fell just short of expectations, reporting a 54% drop in net income and a 6.7% drop in sales
• Family Dollar (FDO) beat expectations with a 15 cent per share increase over a year ago

More earnings are in the pipeline, including:

• Goldman Sachs (GS), Tuesday, before market open
• Johnson & Johnson (JNJ), Tuesday, no time given
• Google (GOOG), Thursday, after the close
• JP Morgan Chase (JPM), Thursday, 6:30 a.m. ET
• Citigroup (C), Friday, before market open
• General Electric (GE), Friday, before market open

Tags: Financial, Retail, S&P 500, Sector ETFs