By Noor Zainab Hussain and Elizabeth Dilts Marshall (Reuters) - Goldman Sachs Group Inc on Friday reported a 66% surge in third-quarter profit that smashed expectations, as Wall Street's biggest investment bank rode a record wave of M&A activity and initial public offerings. The bank posted profits of $5.28 billion up from $3.23 billion a year ago, capping a stellar quarter for Wall Street lenders, which have benefited from a rebounding U.S. economy, soaring equity markets and a global deal-making bonanza. Shares of Goldman Sachs were up 2% in mid-morning trading.