The New York city felt the full force of the storm, whose arrival coincided with a high tide. Ocean water has streamed into streets in New York's Queens district, while streets in Brooklyn's Coney Island were also under water. In Manhattan, water from New York Harbour lapped onto pavements in Battery Park, and about 1ft of water washed over the wall of the marina in front of the New York Mercantile Exchange.
The eye of the hurricane moved over New York City at about 09:00 (13:00 GMT. A feared storm surge affecting New York's Hudson River, was about 5ft (1.5m) high and there are concerns that floodwaters may affect underground New York - its subway system and the network of cables that power the city.
Despite the downgrade to a tropical storm, it has still been destructive and disruptive. It is expected to hit Canada on Sunday night. Some 370,000 people living in low-lying areas of New York City had been told to leave, and the city's public transport system has been closed.