This (from the Journal) seems to suggest so, at least within a certain range:
In a sign of how much the doomsday scenario has faded, bank stocks surged Monday despite reports that Wells Fargo was identified in an initial review as one of the financial institutions needing a stronger buffer.
The San Francisco bank's stock jumped 24%, or $4.64, to $24.25 in New York Stock Exchange composite trading at 4 p.m.
My guess is that the market doesn't want too bleak a picture, but doesn't want a whitewash either. The early leaks about stress-test results hint that we may end up in the sweet spot...
Update: Nouriel Roubini thinks we're getting a whitewash (though this was written before the news that Wells Fargo had made the list). In fact, he implies that anything short of declaring a few banks insolvent should count as a whitewash:
This would be good news if it were credible. But the International Monetary Fund has just released a study of estimated losses on U.S. loans and securities. It was very bleak -- $2.7 trillion, double the estimated losses of six months ago. Our estimates at RGE Monitor are even higher, at $3.6 trillion, implying that the financial system is currently near insolvency in the aggregate. With the U.S. banks and broker-dealers accounting for more than half these losses there is a huge disconnect between these estimated losses and the regulators' conclusions. ...
[S]tress tests aside, it is highly likely that some of these large banks will be insolvent, given the various estimates of aggregate losses.
--Noam Scheiber