Officials ordered people in coastal towns and low-lying areas to evacuate, often telling them they would put emergency workers' lives at risk if they stayed.
"Don't be stupid, get out, and go to higher, safer ground," New Jersey Governor Chris Christie told a news conference.
Forecasters said Sandy was a rare, hybrid "super storm" created by an Arctic jet stream wrapping itself around a tropical storm, possibly causing up to 12 inches (30 cm) of rain in some areas, as well as up to 3 feet (1 metre) of snowfall in the Appalachian Mountains from West Virginia to Kentucky.
At 8 a.m. (1200 GMT), the NHC said Sandy was centered about 265 miles (425 km) southeast of Atlantic City and about 310 miles south-southeast (500 km) of New York City.
Worried residents in the hurricane's path packed stores, searching for generators, flashlights, batteries, food and other supplies in anticipation of power outages. Nearly 284,000 residential properties valued at $88 billion are at risk for damage, risk analysts at CoreLogic said.
Transportation systems shut down in anticipation. Airlines canceled flights, bridges and tunnels closed, and national passenger rail operator Amtrak suspended nearly all service on the East Coast. The U.S. government told non-emergency workers in Washington, D.C., to stay home.
Utilities from the Carolinas to Maine reported late Sunday that a combined 14,000 customers were already without power.
The second-largest oil refinery on the East Coast, Phillips 66's 238,000 barrel per day (bpd) Bayway plant in Linden, New Jersey, was shutting down and three other plants cut output as the storm affected operations at two-thirds of the region's plants.
Oil prices slipped on Monday, with Brent near $109 a barrel. "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.
New York City Mayor Michael Bloomberg ordered the evacuation of some 375,000 people from low-lying areas of the city, from upscale parts of lower Manhattan to waterfront housing projects in the outer boroughs.
While Sandy's 85 mph (140 kph) winds were not overwhelming for a hurricane, its exceptional size means the winds will last as long as two days.
"This is not a typical storm," Pennsylvania Governor Tom Corbett said. "It could very well be historic in nature and in scope."
Copyright 2012 by Reuters. All rights reserved.