Katrina pummels New Orleans, Mississippi towns, 40 killed

GULFPORT, Mississippi, Tuesday (Reuters) Hurricane Katrina ripped into the U.S. Gulf Coast on Monday, pummeling the historic jazz city of New Orleans with 100 mph (160 kph) winds and swamping Mississippi resort towns and lowlands where local media reported around 40 dead.

Five people were confirmed dead and more fatalities were expected as searchers combed devastated areas. The Sun Herald on the Mississippi coast reported around 40 deaths in Biloxi.

New Orleans, a city that sits below sea level and has long feared catastrophic damage from a massive hurricane, took a powerful blow from Katrina. But it was spared the worst when the storm turned at the last moment, sending its powerful wall of water toward Mississippi.

"The state has suffered a grievous blow on the coast," Mississippi Gov. Haley Barbour said. An oil drilling rig broke free of its mooring in Mobile Bay, Alabama, and slammed into a bridge. At least two rigs were adrift in the Gulf of Mexico, where Katrina raged through key offshore oil and gas fields as one of the strongest hurricanes on record.

Katrina, which hit the coast as a Category 4 storm on the five-stage Saffir-Simpson hurricane scale, could become the most expensive storm in U.S. history, costing insurers up to $26 billion, risk analysts said.

In the city known as the birthplace of jazz, the storm shattered high-rise windows, littered the streets of the historic French Quarter with debris and tore through the roof of the Superdome football stadium, where 10,000 people had taken shelter when authorities ordered New Orleans evacuated.

But its sustained winds dropped to 135 mph (217 kph) as it hit land around daybreak and a late turn to the east may have spared the city even worse damage, as its levee system appeared to hold off the Mississippi River and Lake Pontchartrain.

Louisiana Gov. Kathleen Blanco said rescuers have plucked hundreds of people off rooftops and from the water. Hundreds more remained stranded as night fell, and thousands of homes in the took in water.

She urged residents to stay wherever they had sought shelter because roads were flooded and blocked with fallen trees, power lines were down and phone service was out.

"It's too dangerous to come home," Blanco said.

Officials said up to 20 buildings in New Orleans had collapsed or were in danger of doing so.

"We have a tough, tough people," said Blanco. "We party hard, we work hard ... we know we can get through this."

Katrina knocked out electricity to about 670,000 power company customers, or about 1.3 million people, in Louisiana, Mississippi, Alabama and Florida, utility companies said.

By 10 p.m. CDT (0300 GMT) Katrina had deteriorated into a tropical storm centered over northeast Mississippi near the Alabama state line, steaming north-northeast. With heavy rains and 60 mph (97 kph) winds, it was just below hurricane strength.

Katrina's last-minute turn away from New Orleans heightened the misery for the Mississippi coastal tourist havens of Biloxi and Gulfport, where a 20-foot (6-metre) storm surge pushed seawater hundreds of yards (metres) inland.

In Mississippi, the storm swept boats onto coastal highways and swamped waterfront gambling halls.

The Mississippi Gaming Commission shut down 17 casinos and the industry faced millions in lost revenue each day.

Damage on the Mississippi waterfront was catastrophic, with several Biloxi landmarks reported destroyed. At nightfall, Gulfport was a twisted mess, littered with sheet metal, downed trees and obliterated structures.

"It came in on Mississippi like a ton of bricks. It's a terrible storm," said Barbour. Buildings that survived 1969's Hurricane Camille - and its 190 mph (300 kph) winds - succumbed to Katrina, he said.

Asked about his worst fear, Barbour said: "That there are a lot of dead people out there." President George W. Bush approved disaster declarations for Louisiana and Mississippi to help them obtain government aid.

On the outskirts of New Orleans, waves of water surged through parking lots and the streets of subdivisions, the wind kicking up whitecaps. Katrina plucked trees from the ground, ripped roofs off houses and folded traffic signs in half.