“The rise in the stock price today reflects two potential outcomes. The first is that the CEO steps down. The second is that the company is sold outright,” said David Honold, a portfolio manager at Turner Investments.

“Wall Street seems to love when anybody’s fired. They think all of a sudden Merrill’s fortunes will change,” said Richard Bove, a Punk Ziegel & Co. analyst.

O’Neal has drawn the ire of New York-based Merrill’s board after he floated the idea of a possible combination with Wachovia without first seeking the directors’ approval, according to a New York Times report, which cited unnamed people familiar with the matter. In heavy trading, Merrill Lynch stock closed up at $66.09 per share.

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