NEW YORK ( TheStreet) -- The potential for a shutdown of the federal government hasn't panicked Wall Street so far but the midnight deadline is sure to cast a shadow over Friday's session.

Judging by the rhetoric from both sides, the chances for a resolution of the situation seem slim. The Republicans were able to push a one-week stopgap funding bill through the House of Representatives on Thursday but the president is standing firm, vowing a veto, so the stalemate continues.

Most observers agree the Grand Old Party would take the bigger hit from a public perception standpoint if the shutdown comes to pass but there's almost no momentum for a deal right now on either side of the aisle. Obama took the stance on Tuesday that the Democrats had met the Republicans' original demands for cuts totaling $73 billion, and has stuck to it, saying Boehner & Co. are playing politics.

The Dow Jones Industrial Average has declined in two of the last three sessions but the blue-chip index is still up 0.3% in what's been a fairly quiet week ahead of first-quarter earnings season. Alcoa ( AA), the first Dow component to release numbers each quarter, is due to report after Monday's closing bell, and the big banks, led by JP Morgan Chase ( JPM) on April 13, will follow soon after.

This past week, 5% of the S&P 500 reported their first-quarter results, and the latest data from Thomson Reuters has blended earnings growth, which includes the reported numbers and analysts consensus numbers, at 11.6% for the March period. That's a tick down from 13% on April 1, but small-sample size is to blame, rather than analysts bringing down estimates.

Wall Street got some positive pre-announcements after Thursday's closing bell with Tempur-Pedic ( TPX) and Seagate Technology ( STX) giving bullish outlooks, so maybe that's a sign of good things to come.

The big test of this coming earnings season will be if companies can show some sales growth. Profits since the financial crisis kicked in have largely been the product of cost-cutting and now that the economic recovery seems to be on relatively firm ground, Wall Street wants to see the top line take off.

The burst of M&A to start this year has in part been attributed to companies looking to buy growth, rather than spending money on strategic moves or internal expansion. The surprise multi-billion dollar deal this week, Texas Instruments' ( TXN) decision to pay $6.5 billion for National Semiconductor's ( STX), forking over a premium of more than 70%, looks like a prime example of this.

Wall Street loves to trade off consolidation but it's not necessarily an indication that the economic growth is about to accelerate enough to start bringing unemployment down at a meaningful pace. With the end of "QE2" in June creeping closer every day, Ben Bernanke and his cohorts at the Federal Reserve would certainly prefer that companies reach in their pockets to hire new employees, rather than buy up their competitors.

As TheStreet's Gregg Greenberg puts it in the video corresponding with this story, "The Fed chief would surely like to see some strength before taking the economy's training wheels off."

Traders do get a shred of economic data to trade off with February wholesale inventories due at 10:00 a.m. ET. According to economists surveyed by Briefing.com, the market is expecting an increase of 1%, down slightly on a sequential basis from growth of 1.1% in January.

-- Written by Michael Baron in New York.

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