NEW YORK (CNN/Money) - U.S. futures fell sharply Thursday morning as news of blasts on London's transportation system rattled investors and also sank major markets in Europe.

Early Thursday, stock futures were deep in the red, indicating a negative opening on Wall Street. But futures were off their lows a few hours after what many authorities believe was a terrorist attack.

"The shock value is wearing off," said Sam Stovall, chief investment strategist with Standard & Poor's. "We'll probably have a sharp selloff at the open but then my guess is that a lot of commentary during the day will be about how soon investors should get back in."

Added Stovall,"Looking back at other negative events such as Sept. 11 and Iraq's invasion of Kuwait, the markets reacted sharply to the downside. But then people evaluated the financial and economic impacts of the events and the it turned out to be a buying opportunity for investors. Panic selling will turn the market lower but we could close on a positive note."

Phil Dow, stock market strategist with Dain Rauscher, agreed with Stovall.

"Terrorism threats have been a wildcard out there and it looks like its happened again," said Dow. "It certainly looks like there is panic selling going on in Europe, but the day could still end flat to modestly higher."

New York Stock Exchange spokesman Ray Pellecchia said trading hours would be normal Thursday. When asked if additional security measures would be taken in the wake of the London explosions, he said the exchange does not comment on security issues.

Major European markets fell sharply after reports of the explosions on London's transportation system. Major Asian markets, closed before the explosions, ended lower on higher oil prices.

"This feels like we are revisiting Sept. 11 but obviously not of the same magnitude," said a trader based in London, who did not want to be named. "The market here is down 3 percent as a result of the blasts because there is a lot of uncertainty about what caused the explosions."

British Prime Minister Tony Blair said Thursday it's "reasonably clear" that the explosions were a coordinated series of terrorist attacks.

A spokeswoman for Merrill Lynch in London told CNN/Money that all of its staff in London were safe.

U.S. light crude oil for August delivery touched a record $62.10 in electronic trading as the year's first Atlantic hurricane threatened U.S. Gulf production and refining, but the contract retreated below $60 after the London explosions. It bounced back, but remained $1.13 lower at $60.15.

Brent crude was volatile, slipping 74 cents to $59.11 a barrel. It reached an intraday record $60.70, then plunging to $55.55 before bouncing up again.

Treasury prices soared after the explosions, sending the yield on the 10-year note down to 3.99 percent from 4.07 percent late Wednesday. The yield, which declines when prices rise, was as low as 3.94 percent before bouncing up.

The dollar was weaker against the euro and the yen, although it recovered some of the losses that occurred immediately after the London incident.

The number of Americans seeking new claims for jobless benefits rose last week, according to a government report Thursday.

The Labor Department said first-time unemployment claims increased by a seasonally adjusted 7,000 to 319,000 for the week ending July 2. Economists had expected claims to rise by 10,000 to 320,000, according to economists surveyed by Briefing.com.

Wall Street suffered a day of losses Wednesday on the back of continuing unease over record high crude oil prices. The Dow Jones industrial average lost around 1 percent. The broader Standard & Poor's 500 index lost 0.8 percent, while the Nasdaq composite lost 0.5 percent.

In corporate news, the quarterly reporting period gets underway with Dow component Alcoa (Research) expected to post second-quarter results after the close of trading. The aluminum producer is expected to have earned 48 cents per share, up from 46 cents a year earlier.