Katie Bender gets some assistance from Johanna Bender, left, as they dump water from a boot while sitting on a flooded street after Hurricane Arthur passed through in Manteo, N.C., Friday, July 4, 2014. Arthur began moving offshore and away from North Carolina's Outer Banks early Friday after hitting the state's barrier islands overnight, creating a Fourth of July holiday that saw flooding and tens of thousands of power outages. (AP Photo/Gerry Broome)
This Friday, July 4, 2014 aerial photo provided by the U.S. Coast Guard shows flooding caused by Hurricane Arthur on the Outer Banks of North Carolina. Arthur struck North Carolina as a Category 2 storm with winds of 100 mph late Thursday, taking about five hours to move across the far eastern part of the state. (AP Photo/U.S. Coast Guard, Petty Officer 3rd Class David Weydert)
Workers with T&D Solutions work to repair power lines along Highway 58 in Emerald Isle, N.C., Friday, July 4, 2014. Hurricane Arthur began moving offshore and away from North Carolina's Outer Banks early Friday after hitting the state's barrier islands overnight and causing flooding and thousands of power outages. (AP Photo/Randall Hill)
A vehicle sits in rising waters as Hurricane Arthur passes through the area in Nags Head, N.C., Friday, July 4, 2014. (AP Photo/Gerry Broome)
Petty Officer 1st Class Jason Thompson, right, of Detroit, and Megan Schinker, 13, of Stow, Ohio, watch a reading by Massachusetts Gov. Deval Patrick during a concert at the Hatch Shell on the Esplanade in Boston, Thursday, July 3, 2014. The annual Boston Pops Fourth of July concert was moved up a day because of potential heavy rain ahead of Hurricane Arthur. (AP Photo/Michael Dwyer)
This Thursday, July 3, 2014, satellite image taken at 3:45 p.m. EDT and released by the National Oceanic and Atmospheric Administration (NOAA), shows Hurricane Arthur near the coasts of South Carolina and North Carolina. Arthur strengthened to a Category 2 hurricane Thursday night, its winds strengthening to 100 mph before it made landfall near the southern end of the Outer Banks. Little change was expected in the storm's strength Thursday night and Friday, and Arthur was expected to weaken as it travels northward and slings rain along the East Coast. (AP Photo/NOAA)
AVALON, NC - JULY 04: Surfers take advantage of the large waves left by Hurricane Arthur, July 4, 2014 in Avalon, North Carolina. Hurricane Arthur hit North Carolina's outer banks overnight causing widespread power outages, flooding and damage, and has since weakened to a Category 1 as of Friday morning. (Photo by Mark Wilson/Getty Images)
Duke Energy's Jason Pearce, top, and Brandon Hicks repair a power line to a home in Beaufort, N.C., after it was downed by a fallen tree during Hurricane Arthur, on Friday, July 4, 2014. (Chris Seward/Raleigh News & Observer/MCT via Getty Images)
Douglass Godette cleans up debris from his yard in Beaufort, N.C., caused by Hurricane Arthur, on Friday, July 4, 2014. (Chris Seward/Raleigh News & Observer/MCT via Getty Images)
Lighting strikes over the Empire State Building as a major storm comes in New York City July 2, 2014. Tropical Storm Arthur is headed up the East Coast and could become a hurricane in some areas by July 3, 2014. AFP PHOTO / Timothy A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)
Dark clouds form over lower Manhattan as a major storm comes in over the city July 2, 2014. Tropical Storm Arthur is headed up the East Coast and could become a hurricane in some areas by Thursday. AFP PHOTO / Timothy A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)
CAPE HATTERAS, NC - JULY 02: Stephen Hunter Hicks surfs near the Hatteras Pier, damaged in previous hurricanes, July 2, 2014 in Cape Hatteras, North Carolina. A hurricane warning has been issued for North Carolina's Outer Banks due to approaching Tropical Storm Arthur that is expected to gain strength and become a Category 1 hurricane as it enters the area. (Photo by Mark Wilson/Getty Images)
Pedestrians walk in the rain in Boston as the effects of Hurricane Arthur are felt in the area, Friday, July 4, 2014. (AP Photo/Michael Dwyer)
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By EMERY P. DALESIO
MANTEO, N.C. (AP) - Businesses on two of North Carolina's barrier islands hoped to salvage the rest of the holiday weekend after Arthur clipped the state without causing major damage before churning north toward Canada and losing strength early Saturday morning.
Arthur was downgraded to a tropical storm early Saturday as its winds weakened to 70 mph (110 kph). Arthur was moving at about 22 mph and located about 65 miles southwest of Yarmouth, Nova Scotia.
A tropical storm warning was in effect for Nova Scotia, Cape Breton Island, Prince Edward Island and New Brunswick, from the U.S.-Canada border to Grand-Anse.
Meanwhile, in North Carolina, some homes and businesses were flooded, trees toppled and initially thousands were without electricity after Arthur raced through the Outer Banks on Friday, but no deaths or serious injuries were reported. Independence Day fireworks were postponed. About 20 feet of the fragile road connecting Hatteras Island with the rest of the world buckled and required repairs.
The hurricane's effects were mostly confined to Hatteras and Ocracoke islands, and some vacationers were already back on beaches to the north and south on Friday.
Gov. Pat McCrory expressed relief and started encouraging vacationers to return to the beaches, a message echoed by locals.
"This ain't no damage at all. Everybody will be able to come back probably," Lindell Fergeson of Manteo said after driving around to view the aftermath. "It just held up the Fourth (of July) for a little bit, but everything will be open again."
John Wilson was at work Friday sucking water off the floor of the flooded Manteo building he rents to an art gallery. He felt lucky that the building along the town's waterfront only took a foot of water.
"We'll be back in business in a day or two," Wilson said.
The storm that struck the state's southern coast late Thursday as a Category 2 hurricane quickly moved north Friday to cloud the skies over the Delaware and New Jersey shores. Rain from Hurricane Arthur disrupted some New York-area Independence Day celebrations but cleared in time for the nation's largest fireworks display in the East River between Manhattan and Brooklyn.
Tropical storm warnings were in effect for coastal areas as far north as Cape Cod, Massachusetts, and southeastern Canada. Forecasters predicted the storm would weaken before its center moved over western Nova Scotia in Canada early Saturday.
North Carolina officials worked to restore access to Hatteras Island on the island's only road. The state Transportation Department said it was aiming to restore traffic on North Carolina Highway 12 sometime Saturday, when many vacationers were due to start their weeklong cottage rentals.
Farther south, Ocracoke Island's electricity distribution system was badly damaged by Arthur, leading officials to order residents to quit using air conditioners and water heaters so that generator-supplied power could provide refrigeration and other necessities during a cycle of planned outages. A nightly curfew between 10 p.m. and 6 a.m. was declared until power was fully restored. Vacationers were being coaxed to leave with the offer of free ferry rides out.