Cheers erupted on trading floors around the city yesterday as word spread of the stunning downfall of Gov. Spitzer – who spent most of his term as attorney general torturing Wall Street with his witch hunt for financial wrongdoing.

An employee of a major investment bank, who requested anonymity, said the company chef had been instructed to break out bottles of champagne so that the staff could party and swap jokes about “client No. 9.”

Meanwhile, at another giant firm, Merrill Lynch, “everyone broke into cheering on the trading floor,” an employee said. Merrill got socked for hundreds of millions of dollars in penalties, thanks to Spitzer.

Traders were on such a high that stocks rallied for about a half-hour. Then the laughs wore off and the gloom returned for a down day.

“It was more of a sideshow, helping traders take their minds off a difficult market,” said Keybanc Capital trader Dan Hogan.

As for Spitzer’s bigger targets, they gloated in private.

“You can go down the long list of Wall Streeters popping corks, but they’re not out in the open,” said Fraser Seitel, an adviser to the legendary financier David Rockefeller.

A spokesman for Dick Grasso , the one-time head of the New York Stock Exchange driven out by Spitzer, said any comment would be “inappropriate.”

But a pal quipped that Grasso was likely laughing too hard to speak.

Insurance titan Hank Greenberg, forced out as chief of AIG by Spitzer, also ducked speaking on the record.

But one of his execs quipped, “It’s probably a private celebration, and I haven’t been invited.”

Trading assistant Michael Mrakov, standing in front of the New York Stock Exchange, noted that Spitzer “did a lot of damage to Wall Street.”

“Now,” he said, “it’s come back to bite him in the rear end.” With Post Wire Services

paul.tharp@nypost.com