The National Hurricane Center said early Monday that Hurricane Sandy increased its top sustained winds from 75 mph to 85 mph, with higher gusts.
The Category 1 hurricane is moving north at 15 mph after moving northeast Sunday night. Hurricane-force winds extend up to 175 miles from the storm's center. Gale force winds were reported over coastal North Carolina, southeastern Virginia, the Delmarva Peninsula and coastal New Jersey.
Sandy is about 385 miles south-southeast of New York City and the center of the storm is expected to be near the mid-Atlantic coast on Monday night. It was expected to hook inland during the day, colliding with a wintry storm moving in from the west and cold air streaming down from the Arctic.
From Washington to Boston, big cities and small towns were buttoned up against the onslaught of Sandy, with forecasters warning that the New York area could get the worst of it -- an 11-foot wall of water.
"The time for preparing and talking is about over," Federal Emergency Management Administrator Craig Fugate said Sunday as Hurricane Sandy made its way up the Atlantic on a collision course with two other weather systems that could turn it into one of the most fearsome storms on record in the U.S. "People need to be acting now."
Airlines canceled more than 7,200 flights and Amtrak began suspending train service across the Northeast. New York, Philadelphia, Washington and Baltimore moved to shut down their subways, buses and trains and said schools would be closed on Monday. Boston also called off school. And all non-essential government offices closed in the nation's capital.
The New York Stock Exchange said it will be shut down Monday, including electronic trading. Nasdaq is shutting the Nasdaq Stock Market and other U.S. exchanges and markets it owns, although its exchanges outside the U.S. will operate as scheduled.
"We were told to get the heck out. I was going to stay, but it's better to be safe than sorry," said Hugh Phillips, who was one of the first in line when a Red Cross shelter in Lewes, Del., opened at noon.
"I think this one's going to do us in," said Mark Palazzolo, who boarded up his bait-and-tackle shop in Point Pleasant Beach, N.J., with the same wood he used in past storms, crossing out the names of Hurricanes Isaac and Irene and spray-painting "Sandy" next to them. "I got a call from a friend of mine from Florida last night who said, 'Mark, get out! If it's not the storm, it'll be the aftermath. People are going to be fighting in the streets over gasoline and food.'"
However, CBS News correspondent Chip Reid reports, some, like Ocean City, Md., surfer Brian Dean, said they have decided to stay.
"We've got everything pretty well situated, bunkered down, generators, [we'll] hang out, ride it out. We rode out Irene last year, it wasn't that bad," he said.
Authorities warned that the nation's biggest city could get hit with a surge of seawater that could swamp parts of lower Manhattan, flood subway tunnels and cripple the network of electrical and communications lines that are vital to the nation's financial center.
Sandy was blamed for 65 deaths in the Caribbean before it began traveling northward, parallel to the Eastern Seaboard.
Forecasters said the combination of it with the storm from the west and the cold air from the Arctic could bring close to a foot of rain in places, a potentially lethal storm surge of 4 to 11 feet across much of the region, and punishing winds that could cause widespread power outages that last for days. The storm could also dump up to 2 feet of snow in Kentucky, North Carolina and West Virginia.
Louis Uccellini, environmental prediction chief for the National Oceanic and Atmospheric Administration, told The Associated Press that given Sandy's east-to-west track into New Jersey, the worst of the storm surge could be just to the north, in New York City, on Long Island and in northern New Jersey.
Forecasters said that because of giant waves and high tides made worse by a full moon, the metropolitan area of about 20 million people could get hit with an 11-foot wall of water. Reid reports from Ocean City that sea levels could rise 8 feet above normal - enough to flood much of the city.
"This is the worst-case scenario," Uccellini said.
New York Mayor Michael Bloomberg warned: "If you don't evacuate, you are not only endangering your life, you are also endangering the lives of the first responders who are going in to rescue you. This is a serious and dangerous storm."
New Jersey's famously blunt Gov. Chris Christie was less polite: "Don't be stupid. Get out."
New York called off school Monday for the city's 1.1 million students and shut down all train, bus and subway service Sunday night. More than 5 million riders a day depend on the transit system.
Officials also postponed Monday's reopening of the Statue of Liberty, which had been closed for a year for $30 million in renovations. The United Nations said it would close Monday and canceled all meetings at its headquarters.
In Washington, President Obama promised the government would "respond big and respond fast" after the storm hits.
"My message to the governors as well as to the mayors is anything they need, we will be there, and we will cut through red tape. We are not going to get bogged down with a lot of rules," he said.