No injuries or deaths were reported. After praising emergency officials and saying the state dodged a bullet, Gov. McCrory noted that all of North Carolina's beaches were open outside of the Outer Banks and encouraged residents and visitors to enjoy the holiday. He was heading to the beach himself for an Independence Day parade in Southport, a welcome surprise when he expected to be stuck in Raleigh monitoring the storm all day."The North Carolina beaches are open for business and they're open for tourists," McCrory said. "The umbrellas are going up as we speak right now." By 11 a.m. Friday, Arthur had weakened to a Category 1 hurricane with maximum sustained winds around 90 mph, and additional weakening is expected, the U.S. National Hurricane Center said. The center was about 100 miles east-southeast of Ocean City, Maryland, and the storm was moving northeast near 24 mph. While the Northeast wasn't expected to take a direct hit, the rain from Arthur's outer bands was disrupting the holiday. Fireworks displays in New Jersey and Maine were postponed until later in the weekend. Tropical storm warnings were in effect for coastal areas as far north as Cape Cod, Massachusetts. Tropical storm watches and warnings were in effect for Nova Scotia and New Brunswick in southeastern Canada. Still, the first hurricane known to strike the U.S. on July 4 caused some frayed nerves on North Carolina's Outer Banks a 200-mile string of narrow barrier islands with about 57,000 permanent residents and around 250,000 visitors on most summer weekends. A mandatory evacuation was issued for the southern Outer Banks. But while most visitors left, many residents stayed, accustomed to hurricanes that strike the area on average about every four or five years. Jesse and Carol Wray rode out the storm in their home in Salvo on North Carolina Highway 12. They said the island was under several feet of water at the height of the storm. The six-foot-tall lamppost at the end of their driveway was under water except for its top, and that was after the sound a quarter-mile away receded several feet since first light, said Jesse Wray, a retired Norfolk, Virginia, firefighter. "I'm surprised that it got this bad. There's all kind of debris floating around here. I know a lot of people who lost their houses around here" if they were built on the ground instead of elevated, said Wray, whose home is on pilings 9 feet high which kept it dry. Arthur is the first named storm of the Atlantic hurricane season. It is the earliest in the season a hurricane has made landfall in North Carolina. McCrory said people who are still waiting on Arthur need to heed warnings, even if North Carolina came through better than expected. "I encourage them to take this very seriously as we did and hope for the best results," the North Carolina governor said. "We've always felt that it was better to overreact than underreact, gladly this storm was more underwhelming than anticipated, which was very good news." ___ Associated Press writers Martha Waggoner in Raleigh, N.C, Skip Foreman in Charlotte, N.C., and Philip Marcelo in Boston contributed to this report. ___ Emery Dalesio can be reached at http://twitter.com/emerydalesio .