Superstorm Sandy finally receded Tuesday, but only after carving a trail of destruction from the Caribbean to Canada that left more than 100 dead, New York in chaos and millions without power.

The storm, which claimed 67 lives in the Caribbean and at least 42 in the United States including 18 in New York City, added an uncertain twist to the US presidential race, striking one week before the nation votes in a cliffhanger election.

President Barack Obama declared a "major disaster" in New York and New Jersey as he and Republican rival Mitt Romney cancelled a second day of campaign events to focus on Sandy's victims.

"The most important message I have for them is that America is with you. We are standing behind you and we are going to do everything we can to help you get back on your feet," Obama said.

The president said he would tour New Jersey on Wednesday after the state's governor, Chris Christie, told of "unthinkable" devastation in submerged coastal communities.

Daylight brought surreal images of the storm's devastation: a boat washed onto a railway track in New York state, cars bobbing like corks in submerged New York City parking lots, a neighborhood in Queens burnt to a cinder.

More than eight million homes and businesses from the Carolinas to Maine were without power Tuesday, the Department of Energy said.

Transport systems in New York and New Jersey were crippled and expected to stay that way for days as experts warned that the economic fallout could run into the tens of billions of dollars.

Inland, Sandy dumped up to three feet (90 centimeters) of snow on Appalachian states as she continued to pack a punch on Tuesday, spreading blizzard conditions over parts of Ohio, Pennsylvania, and West Virginia.

The storm had made landfall at 8:00 pm Monday (0000 GMT) near Atlantic City in New Jersey, packing hurricane-force winds despite morphing into a post-tropical cyclone after colliding with a descending cold front.

In New York, a record 13.88-feet (4.23-meter) storm surge sent seawater crashing into Lower Manhattan from the Hudson River and the East River.

Subways and road tunnels were flooded and impromptu waterfalls cascaded into the construction site at the World Trade Center as seawater coursed between the iconic skyscrapers of New York's financial district.

New Yorker Sharon Romano recalled how she had been sitting in the front room of her house when a nearby power station exploded, plunging much of Manhattan into darkness.

"I was watching the TV while the electricity was still on, and all of a sudden, I heard something and seconds later, it was just pitch dark," Romano told AFP.

Romano went out onto 14th Street and all she could see was water from the East River coming toward her. "It was just like a beach with no sand," she said.

The New York Stock Exchange and the Nasdaq shut down for their first weather-related closures since Hurricane Gloria in 1985. The bourses remained closed on Tuesday but aimed to be reopen on Wednesday morning.

With Lower Manhattan transformed into a deserted ghost city of debris and marooned cars, New Yorkers faced the daunting prospect of days if not weeks of disruption as engineers struggle to get power back.

"My girlfriend and I got prepared," said Tommy Flynn, a 57-year-old photographer in a leather jacket who was preparing to hunker down at home for several days without electricity.

"We got lots of water, dry food, batteries, flashlights and candies," Flynn told AFP. "And we have nowhere else to go to."

One of the most devastating scenes and amazing rescue stories was in the Queens neighborhood of Breezy Point, where firefighters in boats had to save more than 25 people trapped in a massive inferno.

More than 80 homes were reduced to scraps of smoldering metal next to charred, burnt-out cars lying in puddles of putrid floodwater.

New York Mayor Michael Bloomberg said Sandy's fierce winds spread the flames like a forest fire across the neighborhood.

"Winds were just devastating, blowing from one building to the next one and those buildings were close together," Bloomberg told a press conference.

The destruction was not limited to New York. Cities up and down the Eastern Seaboard from Boston to Philadelphia to Washington were buffeted by storm-force winds and coastal communities suffered widespread flooding.

CNN reported that 200 people had been rescued from communities like Seaside Heights in New Jersey. Television pictures showed the entire town submerged by floodwater.

Sandy weakened Tuesday with winds reduced to 45 miles (70 kilometers) per hour but was still dumping heavy rain and snow in parts of Ohio and Pennsylvania.

Forecasters warned that flooding would continue along the densely-populated mid-Atlantic coast and 7,400 National Guardsmen were mobilized in 11 states to provide emergency relief.

Authorities had ordered hundreds of thousands of residents in areas from New England to North Carolina to evacuate their homes and seek shelter, but many chose to stay on, to the frustration of police and local officials.

Falling trees tore down power cables, while storm warnings cut rail links and stranded tens of thousands of travelers at airports across the region.

"The New York City subway system is 108 years old, but it has never faced a disaster as devastating as what we experienced last night," city transport director Joseph Lhota said.

Facing a long haul, some New Yorkers could not disguise their frustration.

"I have no water, no gas. I walked down 20 flights of stairs to get to street level and now I must try to get to the office," accountant Joseph Warburton told AFP.

Obama displayed resolute leadership in the face of the storm as he strived to avoid repeating the mistakes of predecessor George W. Bush, whose bungled response to Hurricane Katrina in 2005 tainted his presidency.

"Do not figure out why we can't do something. I want you to figure out how we do something," he told government officials during a surprise visit Tuesday to the American Red Cross in Washington.

"I want you to cut through red tape. I want you to cut through bureaucracy. There's no excuse for inaction at this point."

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