NEW YORK (CNN/Money) - Stocks gained Thursday as investors recovered from the shock of the bombings in London and geared up for Friday's June jobs report.

The Dow Jones industrial average (up 31.61 to 10,302.29, Charts), the broader Standard & Poor's 500 (up 2.93 to 1,197.87, Charts) index and the Nasdaq composite (up 7.01 to 2,075.66, Charts) all climbed around 0.3 percent Thursday.

Friday brings the June employment report. Employers are expected to add 195,000 jobs to their payrolls, according to a consensus of economists surveyed by Briefing.com. Employers added 78,000 to their payrolls in May.

The unemployment rate, generated by a separate survey, is expected to hold steady at 5.1 percent.

"Our pattern has been a tough month, followed by a good one, and it looks like we're due for a good one," said David Briggs, head of equity trading at Federated Investors.

A strong payroll report would be a welcome development for investors after Thursday's news of a terrorist attack in London.

But the report will have to be particularly strong to impress stock investors still wary about the economic recovery.

One benefit of a payroll report that falls short of estimates is that it would reassure investors that the Federal Reserve can stop raising interest rates sooner rather than later.

Four coordinated explosions hit London's transportation system during rush hour, wounding hundreds and killing as many as 40 people, according to the British government, in what authorities say is likely a terrorist attack.

Stocks initially slumped on the news, along with European markets. But U.S. stocks managed to recover in the afternoon and European stocks managed to cut losses by the close. Treasury bond prices remained higher, lowering the corresponding yields.

There was a knee-jerk reaction at the open, but beyond that, any negative impact on stocks was very brief, said Federated's Briggs.

"Unfortunately, people have gotten used to this environment," he said, referring to the reality of a post-September 11 world.

Oil prices were very volatile, spiking in the early morning, slumping more than 3.5 percent in the afternoon, before closing down by less than 1 percent.

Nonetheless, the decline in oil prices helped U.S. stocks stabilize, as did gains in retail, home building and select techs.

All in all, the reaction to the attacks in financial markets seemed fairly muted after the initial shock wore off. Analysts say that the attacks are unlikely to have a long-term impact on the markets.

"Heaven forbid there is another attack and the impact of this becomes broader; then you could see a longer-term effect," said Stephen Leeb, president of Leeb Capital Management. But short of that, "it's not going to change the basic outlook for stocks and the economy."

"The financial markets are pretty resilient to anything other than a recession," Leeb added, noting that historically, events at this level have proved to disrupt markets only in the short term.

After the close of trade Thursday, Alcoa (Research) unofficially kicked off the start of the second-quarter earnings reporting period by being the first Dow component to release results, as is traditional.

The aluminum producer reported quarterly earnings and revenue that rose versus the same quarter a year ago, exceeding estimates. Shares rose 3 percent after hours.

Accenture (Research) reported earnings that rose from a year ago and beat estimates, on revenue that rose, but was shy of estimates. Shares gained nearly 5 percent after hours.

Also after the close, Siebel Systems (Research) warned that fiscal second-quarter revenue will fall short of expectations, as it failed to close certain deals late in the quarter. The business software maker also said that it will take a charge of up to $90 million. Shares lost 3 percent in extended-hour trading.

The Dow 30 rose on gains in select components, including IBM (up $1.57 to $77.38, Research) and Caterpillar (up $2.05 to $97.35, Research), which both added two percent.

Gains were limited by weakness in components such as Walt Disney (down $0.34 to $24.45, Research), General Motors (down $0.40 to $33.82, Research) and Merck (down $0.58 to $29.98, Research).

Fellow Dow component Wal-Mart Stores (up $0.13 to $49.51, Research) was one of many retailers reporting upbeat June sales Thursday morning. However, shares barely budged.

Among other movers in the sector, Guess (up $2.13 to $19.30, Research) jumped over 12 percent after reporting June same-store sales rose 11 percent versus a year ago, well above estimates.

AnnTaylor (up $1.91 to $25.55, Research) gained more than 8 percent after reporting a narrower-than-expected dip in June same-store sales.

On the downside, closeout retailer Big Lots (down $2.01 to $11.29, Research) slumped over 15 percent after reporting weaker-than-expected June sales and warning that it will post losses in the current quarter and next quarter.

Home building stocks bounced, after Pulte Homes (up $4.03 to $88.44, Research) and MDC Holdings (up $2.80 to $85.28, Research) both forecast strong new home orders in the just-completed quarter.

The Dow Jones Home Construction (up $32.09 to $1,035.71, Research) index gained 3.2 percent.

As has been the case following other recent terrorist attacks, stocks of companies that deal in security surged Thursday morning.

Among the movers, IPIX (up $0.54 to $3.28, Research), which makes surveillance devices, jumped nearly 20 percent and Magal Security Systems (up $1.03 to $8.90, Research), which makes intrusion detection devices, climbed 13 percent.

Market breadth was positive, after having been decidedly negative all morning. On the New York Stock Exchange, losers and winners were pretty even on volume of 1.18 billion shares. On the Nasdaq, decliners barely topped advancers on volume of 1.33 billion shares.

Investors shrugged off an early morning report showing that the number of Americans filing new claims for unemployment rose to 319,000 last week, in line with estimates.

Treasury prices rose modestly in reaction to the London explosions, giving back bigger gains accrued earlier. The advance lowered the yield on the 10-year note to 4.04 percent from 4.07 percent late Wednesday. The yield was as low as 3.94 percent before recovering. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell modestly versus the euro and the yen.

COMEX gold fell after gaining in the morning, losing 30 cents to $424.20 an ounce.

Oil prices ended a volatile session with modest losses. U.S. light crude oil for August delivery fell 55 cents to settle at $60.73 a barrel on the New York Mercantile Exchange. Oil had hit a record trading high of $62.10 per barrel earlier in the session and had briefly fallen to as low as $59.05 a barrel.

Worries about tropical storms hurting production in the Gulf of Mexico sent oil prices climbing to record highs Wednesday, which in turn pressured stocks.