In Maryland, at least 100 feet of a fishing pier at the beach resort of Ocean City was destroyed, and Gov. Martin O'Malley said there would be devastating flooding from the swollen Chesapeake Bay.
"There will be people who die and are killed in this storm," he said.
At least half a million people had been ordered to evacuate, including 375,000 from low-lying parts of New York City, and by the afternoon authorities were warning that it could be too late for people who had not left already.
Millions of people stayed home from work. Sheila Gladden evacuated her home in Philadelphia's flood-prone Eastwick neighborhood, which took on 5½ feet of water during Hurricane Floyd in 1999, and headed for a hotel.
"I'm not going through this again," she said.
Those who stayed behind had few ways to get out. New York's subways, which serve 5 million people a day, were shut down. The Holland Tunnel connecting New York to New Jersey was closed, as was a tunnel between Brooklyn and Manhattan.
Even so, authorities worried that salt water would seep through the boarded-up street grates above the subway and through the sandbags placed at subway entrances, crippling the electrical connections needed to operate the subway. Authorities also worried that the surge of seawater could damage the underground electrical and communications lines in lower Manhattan that are vital to the nation's financial center.
Stock and bond markets were closed Monday and Tuesday, the first shutdown since the days after the Sept. 11 attacks in 2001 and the first two-day closing of the stock market because of weather since a blizzard in 1888. The New York Stock Exchange is inside the mandatory evacuation zone in lower Manhattan, blocks from New York Harbor.
If the storm reaches the higher estimate of $20 billion in damage, that would put it ahead of Hurricane Irene, which raked the Northeast in August 2011 and caused $16 billion in damage. Hurricane Katrina, which killed 1,200 people, cost $108 billion.