NEW YORK — Merrill Lynch & Co. shares surged Friday amid reports Chairman and Chief Executive Stan O'Neal might be ousted, after he reportedly held deal talks with Wachovia Corp. without first consulting his board of directors.

O'Neal, who became CEO five years ago, approached the Charlotte-based bank in recent weeks to help shore up Merrill's weakened financial position, according to a New York Times report, which cited unnamed people familiar with the matter. The world's largest brokerage on Wednesday reported its first loss since 2001 after writing down $7.9 billion of bad mortgage-related debt.

Both Merrill Lynch and Wachovia declined comment.

Among the potential replacements suggested for O'Neal are BlackRock Inc. Chief Executive Larry Fink and NYSE Euronext CEO John Thain. Both BlackRock and the NYSE declined to comment.

Shares of Merrill leaped $4.10, or 6.7 percent, to $65. Even with the big one-day gain, the stock is still down more than 30 percent for the year. Wachovia shares rose 71 cents to $45.80.

Mike Mayo, an analyst with Deutsche Bank, wrote in a client note a Merrill takeover is one of several potential outcomes as the brokerage tries to sort out its management and financial issues. If it does find a suitor, he estimated a deal would cost $100 per share to $120 per share, or as much as $98.59 billion.

Punk Ziegel & Co. analyst Richard X. Bove said in a research report speculators are "gorging themselves" on investment banking stocks, assuming other companies will take notice of how cheap the shares are and buy them out.

But he also said Merrill Lynch is too big to be bought. The company has a market value of $52.33 billion, and Wachovia "cannot buy Merrill without destroying Wachovia as it is presently run."