Merrill Lynch, the world's largest brokerage, saw its stock price soar on Friday amid speculation that its Chairman and Chief Executive Stan O'Neal would be forced out and that the company could be acquired.

Merrill Lynch (NYSE:MER) rose $5.19, or 8.52 percent, to close at $66.09. Shares of Merrill have already dropped by 29 percent this year. It was also recently downgraded by analysts on the possibility of further exposure to subprime risk. Wachovia (NYSE:WB) shares rose $1.45, or 3.22 percent to $46.54

The New York Times reported early Friday that according to sources familiar with the deliberations, O'Neal, 56, approached Wachovia last week about pursuing a merger as one option. However, according to the report, O'Neal did not inform Merrill's board, angering its directors.

O'Neal was already under close scrutiny after Merrill reported a $7.8 billion write-down this week in its quarterly report related to losses in mortgage loans and collateralized debt obligations, calling into question the firm's ability to manage risk.

Possible successors, according to the report, include BlackRock chief Laurence Fink and NYSE Euronext head John Thain. O'Neal has be CEO since 2002.