Image: Staples.

Stocks closed the holiday-shortened week on a flat note, with major market benchmarks finishing very close to the unchanged level after recovering from losses early in the day on Thursday. Most of the discussion among market participants centered on what the Federal Reserve will do with interest rates for the rest of the year. After choosing not to make a move in its March meeting, members of the Federal Open Market Committee are nevertheless trying to keep the potential for an interest rate increase in the near future alive. That hurt stocks at first, but those concerns gave way to general optimism by the close. Several stocks performed quite well, including TiVo (NASDAQ:TIVO), Pandora Media (NYSE:P), and Staples (NASDAQ:SPLS).

TiVo soared 23% after reports that the digital video recorder technology company could be in potential merger talks with Rovi (NASDAQ: ROVI). Recently, TiVo has focused its efforts to make deals with cable and satellite television providers to give customers access to its set-top boxes or to incorporate DVR technology into the boxes that the TV providers themselves offer their customers. Given Rovi's work in providing copy protection, software licensing, and other features on set-top boxes, DVRs, and other devices, the combination with TiVo seems like a natural fit. Neither TiVo nor Rovi confirmed the report, but investors nevertheless felt comfortable with the idea of the merger in pushing TiVo shares to their highest level of 2016.

Pandora Media jumped 11%, responding to merger speculation of its own. Late Wednesday, the streaming-music specialist added Tony Vinciquerra to its board of directors, and the fact that Vinciquerra has worked with private equity firm Texas Capital Group for five years led some people to believe that Pandora might be more serious in looking at a potential merger or acquisition. Of course, Vinciquerra's expertise could also simply be a vehicle for Pandora to move its own business forward without looking for strategic combinations, but given the level of merger and acquisition activity in the overall stock market recently, Pandora investors appear to be hopeful that the company could find an interested buyer to bid up for its shares.

Finally, Staples climbed 7%. Shares of the office-supply retailer have been volatile lately as the company's proposed merger with Office Depot (NASDAQ:ODP) undergoes judicial scrutiny, but today's boost stemmed from comments that the judge in its case with the Federal Trade Commission made. The federal district judge accused the FTC of trying to get false testimony in support of its case, and investors quickly jumped on the move as showing that the regulatory agency's case could be weaker than previously thought. The court battle is likely to last into next week, and Staples investors seem increasingly convinced that the merger will have to go through in order for either company to have a long-term chance at survival in the industry.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.