Sears Holding Corp. (SHLD) posted a smaller third-quarter loss Thursday of $127 million, or $1.09 per share, combating customers' continued desire to spend money elsewhere with tighter inventory management and cost-control efforts. Shares jumped 4% in pre-market trading. Excluding store closing costs and other items, Sears lost 81 cents per share, less than the average estimate of $1.09 loss per share.

Did Goldman Sachs Group (GS) Chief Executive Lloyd Blankfein invoke the lord's name in vain when he said Wall Street's most successful bank was doing "God's work?" Experts are divided.

"The question of whether the CEO of Goldman Sachs is doing God's work is at one level a very complex one," says Dr. Andrew Abela, chairman of the Department of Business & Economics at the Catholic University of America. Abela, who is working on a book, Catechism for Business, says, "The vast size of the bank and its extensive influence on markets and on government policy, means that it is operating at all times in a moral minefield."

Some cancers are particularly nasty because they spread so quickly through the body. The same can be said for the way insider trading can spread its black wings throughout the financial system. This comes to mind as one contemplates the latest revelations about Galleon Group, the formerly $3.7 billion hedge fund whose founder, Raj Rajaratnam, has been charged in the largest hedge fund insider-trading case ever. Rajaratnam is out on $100 million bail.

The latest news about Galleon does not expose all the new cancer sites -- but it adds some color to what we already knew. Specifically, it reveals how the SEC failed to investigate Galleon in 2001 after a Galleon associate was convicted of wire fraud, even though a concerned JPMorgan Chase (JPM) analyst reported to the SEC that year that something was fishy at Galleon. And "color" is a key word, because it appears that Galleon and its hangers-on used it as code for insidery information, the use of which to trade may have been in violation of insider-trading laws.

JPMorgan Chase & Co raised concerns about Galleon hedge fund founder Raj Rajaratnam and his associates as far back as 2001, the Financial Times reported, citing an internal company document seen by the newspaper.

Rajaratnam, 52, was arrested on October 16 along with five others in what prosecutors described as the biggest hedge fund insider trading case ever.

The 2001 note, written by an analyst at the bank's alternative asset management arm, said the unit "should reduce our allocation" in Galleon's technology fund, pointing to what it described as "more negative news about Raj and his cohorts," the Financial Times reported.

Earnings at most big banks outpaced expectations in the third quarter. Some banks, like JPMorgan Chase (JPM) and Wells Fargo (WFC), could even brag that they'd brought in record income so far this year. But for many investors, the question is whether better-than-forecast results are sustainable.

When it appears they aren't, things can take a turn for the worse in a hurry. While bank stocks recovered on Thursday, they fell significantly a day earlier when veteran banking analyst Richard Bove at Rochdale Securities cast doubt on Wells Fargo's chances to repeat its strong performance and recommended clients sell the stock as a result. Within moments of Bove's recommendation, the S&P 500 had fallen by 1.5 percent.

How can the U.S. solve its systemic banking issues? If you're former Federal Reserve Chairman Paul Volcker (pictured) or Bank of England Governor Mervyn King, your answer would be: Let's split up the banks. Volcker would like to see some form of a Glass-Steagall-like bill passed to reconstruct the wall between commercial banking and investment banking. Glass-Steagall, a law passed after the Great Depression, was repealed in 1999.

But from actions they've taken, it appears that others, including current Fed Chairman Ben Bernanke and current Treasury Secretary Timothy Geithner, think propping up the largest banks is the best way to go. In fact, they clearly like to see big banks getting bigger. John Mack, CEO of Morgan Stanley (MS), has spoken of the pressure he faced from Bernanke and Geithner to merge Morgan Stanley with JPMorgan Chase (JPM) during the depths of last year's crisis. Bank of America's (BAC) tale of woe regarding how it was pressured to acquire Merrill Lynch is very similar in tone.

Galleon Holdings, the $3.7 billion hedge fund whose founder, Raj Rajaratnam, is out on $100 million bail for his role at the center of a $20 million insider trading scandal, owns big positions in dozens of public companies. And those companies' share prices and management teams could be in trouble. Of course, Galleon's stakes in these companies are a problem only if any of their employees have followed the same process of tipping Galleon as the public companies I posted about here allegedly did.

Disappointing earnings reports from Citigroup (C) and Goldman Sachs (GS) caused stocks to waver for most of Thursday's session before ultimately finishing higher.

The blue-chip Dow Jones Industrial Average ($INDU) rose 47 points, or 0.5 percent, to close at 10,063, while the broader S&P 500 ($INX) added 5 points, or 0.4 percent, to 1,097. The tech-heavy Nasdaq Composite ($COMPX) gained a point to finish at 2,173.

Shares in Citigroup fell more than 5 percent on disappointing results and concern that the financial giant is falling behind rivals JPMorgan Chase (JPM) and Goldman Sachs. Shares in Goldman dropped 2 percent on declining revenue from its investment banking business.

For more on stocks making moves today, be sure to check out BloggingStocks' market wrap up.

Better-than-expected results from a couple of Dow components Wednesday allowed the blue-chip index to surpass the psychologically key 10,000 level for the first time in a year.

The Dow Jones Industrial Average ($INDU) soared 145 points, or 1.5 percent, to close at 10,016, while the broader S&P 500 ($INX) jumped 19 points, or 1.8 percent, to 1,092. The tech-heavy Nasdaq Composite ($COMPX) popped 32 points, or 1.5 percent, to finish at 2,172.

Just a year ago, Wall Street's survival seemed far from assured. Titans of finance like Merrill Lynch and Lehman Brothers had disappeared, and even the strongest of those left standing, including JPMorgan Chase (JPM) and Goldman Sachs (GS), took billions of dollars in government assistance to bolster their balance sheets. The era of wild -- and lucrative -- financial risk-taking was supposed to be over.

The Wall Street Journal even dubbed the final days before Lehman's collapse "the weekend that Wall Street died." Now, of course, it seems that rumors of its demise have been greatly exaggerated -- and the proof is in the profits. JPMorgan's $3.6 billion in net income last quarter, powered by investment banking revenue that rose 85 percent from a year ago, shows that the biggest banks can still make tons of money.

Headlines all over the media scream about the billions of dollars to be paid in Wall Street bonuses, as well as the push by government officials for AIG (AIG) to scale back its planned bonuses. We have heard the cry for compensation reform many times since the financial market crashed, but nothing seems to be done about it.

Can administration pay czar Kenneth Feinberg truly be effective in getting Wall Street pay in line, or is it really the responsibility of the shareholders? In actuality, the pay czar probably won't be able to do anything. But we do know that the people helping to pay for these bonuses are Main Street customers who are charged higher and higher fees and higher and higher interest rates. These are the same taxpayers who helped bail out Wall Street. Would these banks still be in business without the government's bailout money? Some probably wouldn't.

JPMorgan Chase (JPM), the first of the big U.S. banks to report third-quarter earnings, said Wednesday its loan losses are still high and are expected to remain that way for the foreseeable future, a troubling sign for the economy.

While JPMorgan reported a $3.59 billion profit, it also says it roughly doubled the amount of money it set aside for failed home and credit card loans in the quarter.

U.S. stocks are poised to rally at the open of Wednesday's trading session. Surprisingly strong profit and outlook from Intel (INTC) and much stronger-than-forecast results from J.P. Morgan Chase (JPM) helped push stock futures within reach of the 10,000 mark for the Dow industrials.

More here: Before the bell: Futures sharply higher following Intel, JPMorgan Chase results

Some of the companies making headlines today:

Royal Philips Electronics NV (PHG) reported a better than expected net profit of euro174 million ($256 million) for the third quarter on Monday, three times the depressed levels of a year ago, due to cost-cutting measures. Still, the company said sales fell 11 percent. Shares jumped over 6 percent in pre-market trade.

Blackstone Group (BX) is planning to list up to eight of its portfolio companies, according to a source who received a letter the firm sent to investors on Friday. The letter also says that Blackstone is in the process of five sales of companies it owns this year. Of these, four have already been announced and one is imminent, the source said. Shares gained over 4 percent ahead of the bell.

With foreclosure filings occurring every 13 seconds in America, is the Obama Administration really moving fast enough to get help for homeowners in trouble? It took about nine months to get 500,000 of them started on the road to mortgage modification.

A half-million homeowners helped is surely progress, but with 2 million foreclosures this year and economists predicting that number will hit 6 million over the next three years, the government's program is looking more and more like half-empty sandbags thrown against a steadily rising flood.