The shares hit a low of $40.63 in morning trade before recovering to $42.79, up 2 cents, at the close of trading on the New York Stock Exchange. The stock has gained 38 percent so far this year.

Wasserstein's death on Wednesday at the age of 61 left major questions about the direction and leadership of the investment bank he headed.

Shares in the company -- in which Wasserstein and his family trust hold a 11 percent stake -- are expected to be volatile as Lazard searches for a long-term successor. Vice Chairman Steven Golub is serving as interim CEO, Lazard said.

"Mr. Wasserstein was the driving force behind the revival of the company, its public offering and its aggressive moves in recent years to grow once again," said Richard Bove, an analyst with Rochdale Securities.

"Lazard has an ample bench of very talented people that suggest that it can re-emerge as a major factor in mergers and acquisitions and restructuring after Mr. Wasserstein's death. However, one must assume that the rebound will not be immediate," Bove said.

Lazard has more than 150 senior managing directors -- more than three times as many as rivals such as Greenhill & Co and Evercore Partners Inc -- giving it a large group of talented investment bankers to bring in business, said JMP Securities analyst Michael Hecht.

Analysts have identified Golub as a candidate for permanent CEO. Some Lazard bankers, including Gary Parr and Terry Savage, are also under consideration for the post, according to The Wall Street Journal.

"Any void in leadership creates uncertainty, and the market doesn't like uncertainty," said one trader, who declined to be named because he was not authorized to speak to the press.

Oppenheimer & Co downgraded shares of Lazard to "perform" from "outperform," citing the near-term disruption of a CEO transition.

Lazard announced on Sunday that Wasserstein had been hospitalized for an irregular heartbeat and that his condition was "serious." But it described his condition as "stable and recovering" at the time.

The company said the cause of death had not been determined.

Wasserstein, known as "Bid 'em up Bruce" -- a nickname he despised -- had been involved in one of the year's biggest potential deals, advising Kraft Foods Inc in its proposed takeover of British candy maker Cadbury .

"While Mr. Wasserstein was a tremendous figurehead and had a well-deserved reputation as a brilliant dealmaker, we do not expect this event to have a material impact on Lazard's overall financial results," Collins Stewart analyst William Tanona said in a research report.

Forbes magazine recently estimated Wasserstein's wealth at $2.2 billion (1.35 billion pounds), ranking him 147th on its list of the 400 wealthiest Americans.

A private service will be held for family midday tomorrow at the Shaarey Pardes Accabonac Grove Cemetery in East Hampton, New York.

(Additional reporting by Ellis Mnyandu; Editing by James Dalgleish, Gerald E. McCormick and John Wallace)