Hurricane Ophelia is drawing closer to the central North Carolina coast where forecast think it might make landfall. Forecasters say it may make landfall tomorrow.

At 5 p.m. the National Hurricane Center said the hurricane was about 40 miles east of Wilmington and 50 miles southwest of Cape Lookout.

The storm is moving northeast at nearly seven miles per hour. A hurricane warning is in effect for all of the North Carolina coast as well as Pamlico and Albemarle sounds. Winds have diminished in the Wilmington area.

More than half of the losses are in the timber industry, where many of the trees that can be salvaged now have less value. But the damage is widespread, reaching Christmas tree growers and businesses raising poultry.

Damage estimates have surpassed two billion dollars in Mississippi and one billion dollars in Louisiana. Alabama was less severely affected and hasn't compiled figures yet.

Unlike Hurricane Katrina (search), which made a head-on charge at the Gulf Coast two weeks ago, Ophelia had slowly meandered and waxed and waned in strength since forming off the Florida coast last week, making it hard for some to take the storm seriously.

Click here to track Hurricane Ophelia

Wednesday dawned bright and sunny, but windy, on the Outer Banks (search), where stormy weather is a way of life.

"It's an island. The water will come over, it'll go out, and we'll do it all over again," Tiffany Bigham, 27, said after she finished boarding up her living room windows. Bigham, a lifelong resident of Hatteras Island, said she and all the other locals she knows were planning to stay put, despite an order that everyone evacuate the island.

However, the destruction caused by Hurricane Katrina along the Gulf Coast prompted others to take Ophelia more seriously.

"We got such a dose of it on TV, it's almost impossible not to be concerned," said Roger Kehoe, 68, of Yardley, Pa., one of the visitors who left a campground at Myrtle Beach, S.C.

Rain had started falling Tuesday in the state's southeast corner, and by Wednesday morning Brunswick County had measured 6.5 inches. Meteorologists warned that some areas could get a total of 15 inches as the storm slowly crossed the region.

A 50-foot section of street was washed away by heavy surf at Brunswick County's Ocean Isle Beach (search), about 100 miles northwest of the storm's center, and other streets were under water, emergency officials said. A message at the police department said the island's bridge to the mainland was closed.

Some 34,000 homes and business were without power in eastern North Carolina, including the entire barrier island community of Kure Beach — population 1,700 — south of Wilmington, Progress Energy reported.

Northeast of Wilmington, Onslow County reported some docks underwater near the New River Inlet and 215 people in shelters.

At 11 a.m. EDT, Ophelia's large eye was centered about 40 miles south-southeast of Wilmington and about 85 miles southwest of Cape Lookout on the Outer Banks. Slight strengthening was possible. Hurricane-force wind of at least 74 mph extended 50 miles out from the center.

Ophelia had accelerated to 7 mph, moving toward the north-northeast. It was expected to gradually turn toward the northeast and pick up a little speed by late Wednesday, with the center making landfall along or just south of the Outer Banks on Thursday, the hurricane center said.

The forecast track had it then moving out to sea.

Along the exposed Outer Banks, everyone was ordered to evacuate Hatteras Island, visitors had been ordered off Ocracoke Island and the National Park Service closed the Cape Hatteras lighthouse and the Wright Brothers National Memorial in Kill Devil Hills. Schools were closed and nearly 100 people had checked into a shelter in an elementary school in Wilmington.

"I don't really want to mess with it," Bruce McIlvaine of Logan Township, N.J., said as he packed to leave the Outer Banks' Hatteras Island (search) before his vacation ended. "You're on a spit of land a dozen miles into the ocean."

A hurricane warning extended from the South Santee River in South Carolina north to Oregon Inlet at Pamlico Sound in North Carolina, meaning hurricane conditions were expected within 24 hours.

A hurricane watch and tropical storm warning were in effect from the Oregon Inlet north to the North Carolina-Virginia line and southward from the South Santee River to Edisto Beach in South Carolina.

After taunting coastal residents for days, the storm appeared ready to move ashore, as heavy rain battered South Carolina's northern coast and the beaches of southeastern North Carolina.

In Carolina Beach, south of Wrightsville Beach, officials reported a foot of water on one road due to heavy wind and a high tide.

Unlike Hurricane Katrina's devastating charge at the Gulf Coast, the week-old Ophelia had been following a meandering path, making predictions of its landfall difficult. The hurricane center's latest forecasts showed it running along the coast, then veering through Pamlico Sound, crossing the Outer Banks and heading back out to sea.

Its slow movement — 4 mph as of 5:30 p.m. EDT — meant heavy rain could linger over land, possibly causing serious flooding. The hurricane center said up to 15 inches of rain was possible in eastern North Carolina.

At least six North Carolina counties ordered mandatory evacuations of some areas and seven others had voluntary evacuations.

Along the exposed Outer Banks chain, all residents and visitors were ordered to evacuate Hatteras Island on Tuesday, visitors had been ordered off Ocracoke Island and the National Park Service closed the Cape Hatteras lighthouse and the Wright Brothers National Memorial in Kill Devil Hills.

Schools were closed in several coastal counties in both North and South Carolina, while classes were canceled at the University of North Carolina at Wilmington and East Carolina University in Greenville.

The Air Force sent some aircraft from bases in Virginia and North Carolina to airfields farther inland and moved others into hangars.

With power outages expected, North Carolina utilities recalled workers they had sent to the Gulf Coast region after Hurricane Katrina. North Carolina Gov. Mike Easley said coastal residents should be prepared to go without power from two to three days.

"The beaches we expect to take a real beating," Easley said. "The bottom line is we're definitely going to get flooding, not just on the coast but in low-lying areas as the rivers swell from the storm surge itself."

South Carolina Gov. Mark Sanford had called for a voluntary evacuation of oceanfront and riverside areas in the northeastern part of his state. Virginia Gov. Mark R. Warner declared a state of emergency. National Guard troops were on duty in parts of North Carolina and Virginia.

A surfer was missing along the South Carolina coast, and the search had been suspended because of the rough sea.

At 5:30 p.m. EDT, Ophelia was centered about 110 miles south of Wilmington and about 110 miles east-southeast of Charleston, S.C., and was moving slowly north-northwest. A gradual northerly turn was expected during the night or on Wednesday, but continued erratic motion was likely, the hurricane center said.

The storm's likely path across Pamlico Sound and the Outer Banks would mean the biggest flooding threat would come not from the Atlantic Ocean but from the sounds — the bodies of water between the mainland and the barrier islands, said Jonathan Hobbs, a spokesman for the Dare County Joint Information Center. Wind can push enough water out of the sounds to expose their bottoms, he said.

Ophelia became a tropical storm Wednesday off the Florida coast and later strengthened to a hurricane. It is the 15th named storm and seventh hurricane in this year's busy Atlantic hurricane season, which began June 1 and ends Nov. 30.