Large parts of New York City and New Jersey were almost deserted as residents heeded safety pleas to evacuate low-lying coastal areas.
Public transport was suspended in cities up the eastern seaboard and thousands of domestic and international flights grounded.
In total, 54 flights from UK airports to the US were cancelled yesterday with more departures due to be halted today.
Forecasters fear Sandy will become a super-storm when it collides with cold weather fronts from the west and north.
US President Barack Obama urged people on the US East Coast to take heed of warnings to evacuate before Hurricane Sandy's arrival.
Mr Obama said: "Please listen to what your state and local officials are saying.
"When they tell you to evacuate, you need to evacuate.
"This is going to be a big storm, it's going to be a difficult storm."
Millions of people stockpiled supplies as the hurricane bore down on the US East Coast, threatening to bring an 11ft (3.4-metre) storm surge to New York.
Last night a construction crane was dangling off a luxury high-rise in New York City.
No injuries are reported, but streets have been cleared as a precaution as residents on upper floors of buildings nearby were evacuated.
One person also remains missing after a crew of 16 on a tall ship – HMS Bounty, which has appeared in films including Pirates of The Caribbean – were forced to abandon the vessel when it was left stranded around 90 miles off the US coast.
Helicopters rescued 14 of the crew from life rafts. One man was later recovered 'unresponsive' from the water and the hunt for the 16th man continues.
The replica of the famous vessel was built for the film Mutiny On The Bounty.
Sandy is due to collide with a storm moving in from the west and cold air from the Arctic, and is expected to wreak havoc over 800 miles from the East Coast to the Great Lakes.
There are fears that parts of lower Manhattan could be swamped by the storm surge, flooding subway tunnels and crippling electrical and communications lines.