Superstorm Sandy slammed into the East Coast and hurled a record 14-foot surge of seawater at New York City, flooding the financial district, bringing transport to a standstill and putting the presidential campaign on hold a week before Election Day.
A huge fire also ripped through Breezy Point in the borough of Queens in New York City destroying 50 homes Tuesday in one of the city's most remote neighborhoods.
The neighborhood had been extensively flooded by Sandy's record storm surge, and firefighters were hampered in their efforts to bring the blaze under control, a spokesman for the New York Fire Department said.
No casualties were immediately reported and the cause of the fire was under investigation. The fire still was not under control by 5 a.m., the department said.
President Barack Obama signed a declaration of emergency for the state of New York making federal funding available to affected individuals in the counties of Bronx, Kings, Nassau, New York, Richmond, Suffolk and Queens, the statement said.
Meanwhile, Reuters reported that 7 million people were left without electrical power by the storm, which crashed ashore late Monday near the gambling resort of Atlantic City, N.J.
At least 13 deaths were blamed on the storm, according to The Associated Press, while more than 1 million people across a dozen states were ordered to evacuate.
The record storm surge prompted Exelon Corp o declare an "alert" at its New Jersey Oyster Creek nuclear power plant, while stock markets in New York were set to be closed on Tuesday for a second day — the first time the stock exchange has been shut since the Sept. 11, 2001 attacks.
The storm brought a record surge of almost 14 feet (4.2 meters) to downtown Manhattan, well above the previous record of 10 feet (3 meters) during Hurricane Donna in 1960, the National Weather Service said.
Water poured into the subway system and tunnels that run under the rivers around Manhattan, raising concerns that the world's financial capital could be hobbled for days to come.
"Hitting at high tide, the strongest surge and the strongest winds all hit at the worst possible time," said Jeffrey Tongue, meteorologist for the weather service, told Reuters.
Hurricane-force winds as high as 90 miles per hour (145 kph) were recorded, he said.
"Hopefully it's a once-in-a-lifetime storm," Tongue said.
Large sections of New York City were without power, and transportation in the metropolitan area was at a standstill.
"In 108 years our employees have never faced a challenge like the one that confronts us now," Metropolitan Transportation Authority Chairman Joseph Lhota said in a statement.
(Severe flooding in Hoboken. See video from Hudson County TV)
It could take anywhere from 14 hours to four days to get the water out of the flooded subway tunnels, the MTA said.
"The damage has been geographically very widespread throughout the entire subway, bus, LIRR (Long Island Railroad) and Metro North system, MTA spokesman Aaron Donovan said.
The National Hurricane Center said Sandy came ashore as a "post-tropical cyclone," meaning it still packed hurricane-force winds but lost the characteristics of a tropical storm. It had sustained winds of 80 miles per hour (129 kph), well above the threshold for hurricane intensity.
"We have not seen the kind of flooding problems that certainly could have happened thus far, but we've still got a long way to go to get through this storm," Washington Mayor Vincent Gray said on local television.
President Barack Obama declared emergencies in several states including Massachusetts, Connecticut, Rhode Island, New York, New Jersey, and Pennsylvania, authorizing federal relief work to begin well ahead of time. He promised the government would "respond big and respond fast" to states and cities after the storm hit.
"I think we will see low fatalities and that is the major thing," Jack Harrald, director at the Center for Community Security and Resilience at Virginia Tech, told CNBC.
New York in the Dark
New York's main utility said large sections of Manhattan had been plunged into darkness by the storm, with 250,000 customers without power as water pressed into the island from three sides, flooding rail yards, subway tracks, tunnels and roads.
Consolidated Edison it could be anywhere from several days to a week before residents who lost power during the superstorm get their lights back.
It said it was dealing with several different issues — downed overhead lines, a planned shutdown of underground networks and an unexpected explosion at a substation that darkened a large part of lower Manhattan.
In addition, New Jersey power company Public Service Electric and Gas Company (PSE&G) said more than 1 million customers were without power due to the extreme weather conditions.
"PSE&G urges customers to prepare for the possibility of lengthy outages — perhaps seven days or more due to the enormity of Sandy," the company said.
The power blackout prompted a New York City hospital to move out more than 200 patients after its backup generator failed.
Dozens of ambulances lined up outside NYU Tisch Hospital on Monday night as doctors and nurses began the slow process of taking people out. They started with the sickest and youngest, including 20 babies from neonatal intensive care. Some were on respirators operating on battery power.
The hurricane-force winds blew over a construction crane on top of a luxury high-rise building in Manhattan, leaving the crane dangling off the edge of the building. The incident, at a building called One57 on West 57th Street, prompted a huge emergency response. New York City officials ordered people in neighboring buildings to move to lower floors.
It was still dangling Tuesday.
The building is known as one of the priciest ever in New York. A six-bedroom penthouse at the building is under contract for a reported $90 million. The building recently made headlines for tax breaks from a program aimed at low-income housing.
According to the New York Mayor's Office, emergency services were receiving 10,000 calls per half hour as of late Monday night, prompting authorities to urge citizens to only call 911 for life-threatening emergencies.
Stock Markets Shut
U.S. stock markets were to remain closed to Tuesday in the first weather-related closure for the markets in 27 years. Stock exchange operator NYSE Euronext said markets would re-open on Wednesday "conditions permitting."
NYSE Euronext said it was making contingency plans in case of irreparable damage to New York City facilities.
"We stress that, as of now, there has been no damage to the NYSE Euronext NYC
headquarters that would impair trading floor operations. The following plan is precautionary only given the unpredictability of the storm's impact at this time," it said in a statement.
(Read More: The NYSE Mulls the Reopening)
he federal government in Washington was closed and schools were shut up and down the East Coast.
U.S oil prices slipped to just above $85 a barrel on Tuesday, as Sandy shut East Coast refineries, roads and airports, reducing crude and fuel demand in the world's largest oil consumer.
"With refineries cutting runs, we're likely to see a build-up in crude stocks which could be driving bearish prices at the moment," said Michael Creed, an economist at National Australia Bank in Melbourne.
One disaster forecasting company predicted economic losses could ultimately reach $20 billion, only half insured. Most Wall Street analysts have been expecting insured losses of around $5 billion, which they say the industry could easily handle.
"You will see a much higher financial impact when you put everything together. Flooding incidents have a very high impact and financial consequences, and most of them are under-insured so it could turn out to be one of the largest dollar disasters in U.S. history," said Harrald at Virginia Tech.
Peter Schiff, CEO and president of Euro Pacific Capital, agreed the fallout from the storm could be negative for the economy.
"Natural disasters are always bad, there are these Keynesian economists that try to make the argument that it's good because it creates jobs," he told CNBC. "You don't create jobs you displace jobs, you force an economy to have to expense scarce resources, repairing what was damaged, replacing what was lost, those things are done at the expense of other things we could have created if we weren't forced to do that.
Others said it was too early to judge the economic implications.
"At this point, we don't actually know what kind of damage Sandy is going to bring in, whether the estimates are going to live up. When (Hurricane) Irene was moving in last year, there were expectations of much larger damages and much larger impact than actually ended up being the case," Matt Koppenheffer, senior banking analystof Motley Fool, told CNBC.