NEW YORK (CNN/Money) - Are more companies going to start paying dividends in the near future?

Wall Street seems to be hoping so following the resignations of Treasury Secretary Paul O'Neill and White House economic adviser Lawrence Lindsey Friday. The two had been roundly criticized for the economy's woes and one market strategist suggested that O'Neill's departure, in particular, is a message to Wall Street that the Bush administration is serious about making more tax cuts in order to stimulate the economy.

"There was disagreement about tax policies and the need for further stimulus was at issue. O'Neill felt there was no more need for stimulus and it would have been difficult to get a tax package together without unanimity," said Ned Riley, chief investment strategist for State Street Global Advisors.

One of the key parts of a tax cut package that could help investors would be a change in the way corporate dividends are taxed. Companies pay a tax on the dividend after they issue it to shareholders and investors also pay a tax on the income they receive.

Many companies that currently pay no dividends have maintained that it doesn't make sense for them to do so until there is a change in the taxation policy. There has been growing support for an elimination of one of these taxes and the departure of O'Neill and Lindsey may make an end to the double taxation of dividends more likely.

"This could be one of the more important positive tailwinds for the market," says Phil Dow, director of equity research for RBC Dain Rauscher. "A significant portion of the return from stocks historically have been from dividends." That said, Dow does not think that any tax reform will take place until 2004.

From a broad perspective, investors seem to be hoping that if the President chooses people who are more amenable to a large economic stimulus package to replace O'Neill and Lindsey, fears of deflation may come to an end.

Anirvan Banerji, director of research for the Economic Cycle Research Institute, says that if a large-scale stimulus package is passed and that boosts economic growth, inflation would likely increase. This could give corporations much needed pricing power, something they sorely lack now. In turn, that could help push up profit growth.

Looking at individual sectors, Jeffrey Saut, chief investment strategist for Raymond James, says that the shakeup is a big positive for gold stocks since the government's budget deficit is now likely to increase and gold tends to do well in times of economic uncertainty. The increasing prospect of a war in Iraq has also fueled gold's rally. To that end, gold prices hit six-month highs on Friday morning.

Others say that the mere fact that Lindsey and O'Neill are history will be a boon for the overall markets. Fair or not, they were receiving a lot of the blame for the economy's continued woes and investors are betting that Bush will choose replacements with more Wall Street experience.

The news helped the market erase an out-of the gate loss following a worse than expected unemployment report. The Dow, Nasdaq and S&P 500 all finished Friday higher. The Dow had lost more than 100 points in early trading.

"Confidence is a key part of what's happening in the economy and the market," says Mark Zandi, chief economist for Economy.com, a research firm. "You shouldn't underestimate the importance of symbolic moves like these."

New faces to Bush's economic team might also help restore investors' trust in Corporate America and Wall Street, says Brian Rohman, director with asset manager Weiss, Peck and Greer. Rohman notes that state governments have taken more of a lead in trying to enact corporate reforms. He thinks that if Bush appoints someone that is willing to crack down on Wall Street, that would be a major plus for the stock market.

Bush still needs to appoint a new chairman for the Securities and Exchange Commission as well. Harvey Pitt resigned last month after much controversy about his tenure as chairman. So Bush now has a chance to prove to investors that he's taking corporate scandals seriously.

"The administration to date has been benign and almost mute in dealing with corporate governance problems," says Rohman. "Strong central leadership would be a positive. Decentralized leadership creates uncertainty and that is not good for stocks."