Updated from 7:23 a.m. EDT

The

New York Stock Exchange

and the

Nasdaq

opened as scheduled Friday morning, even though a massive power outage that blacked out large parts of the northeastern U.S. the day before still had much of Manhattan without electricity.

Subway service wasn't running in New York, but should be back later in the day, officials believe. Service on many commuter rails is also suspended. However, bridges and tunnels into the city were open.

New York City's mayor said Thursday night that the city would return to business as usual Friday, but electric power hasn't been returned to the city as quickly as had been hoped.

The blackout extended to Cleveland and Toronto, caused mass evacuations from Manhattan office buildings, halted New York subway service and grounded planes in several airports.

In addition to Mayor Michael Bloomberg's comments,

NYSE

officials told news organizations that the exchange would be open Friday -- under emergency power if necessary -- and indicated that no trading data have been lost due to the blackout.

"Power is starting to come back from the north andfrom the west," Bloomberg said at a newsconference Thursday evening. New York Gov. George Pataki declared a state of emergency for the state and deployed additional state police.

Officials blamed an overload of the Niagara Mohawkpower grid for the blackout, which occurred after theclosing market bell Thursday. Niagara Mohawk officials told

CNBC

they "cannotconfirm that we are responsible for this outage."

About half of New York state was out of power as of 7:40 p.m. EDT, according to Dennis Michalski, a spokesman for the New York State Emergency Management Office.

New York has activated various state agencies to try to investigate and fix the power outage. New York state's Public Service Commission is trying to determine the cause of the outage, he said. "They are looking into that feverishly ," Michalski said. However, he added that there is no indication that the cause of the outage came from within New York state and he could not confirm or deny whether the outage originated with the Niagara Mohawk power grid.

"We know that when the power grid went down, it went down safely," he said. But he added, "it's going to be slow restoration process."

The

New York Times

reported that an official at the New York Independent System Operator, the consortium that manages the state's power grid, said the trouble started with a fire at an upstate power plant. But there were conflicting reports about whether the plant is in the region of the Central Hudson utility or in Niagara Mohawk's territory.

"The cause of the outage is not known at this time," Niagra Mohawk spokesman Alberto Bianchetti said in a recorded statement Thursday evening. He said he could not confirm that his firm's network was responsible for the outage. "Niagra Mohawk, like other utilities across the Northeast and Canada, has been affected by a power outage."

Bloomberg said that ConEdison officials had told him that the New York Citypower grid was shut down deliberately, as it was builtto do, to avoid being damaged by an overload. Smokethat led to reports of a fire at a Con Edison plant inNew York was due to the shutdown, according toofficials.

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Bloomberg said, "I can tell you 100 percent surethat there is no evidence as of this moment whatsoeverof any terrorism."

At a news conference, Bloomberg reported that hespoke with the chairman of Con Ed, who reported powerwas starting to be restored upstate and in areas westof New York. He said restoring power would take sometime -- "hours, not minutes."

The grid provides power for New York and stretchesinto Canada. Mike Dendekker, a spokesman for the Office ofEmergency Management in New York, said the blackoutstarted in Canada and went down the Eastern Seaboard.OEM did not know when the power will return.

Rui Estevao, assistant to Toronto Mayor Mel Lastman, said the outage is affecting not only Toronto but all of the province of Ontario. There have been unconfirmed reports that power was starting to come back on in parts of Toronto and Ontario, Estevao said.

Thursday evening, power was off in 15 of Ohio's 88 counties, according to Kelli Blackwell, spokeswoman for the state's Emergency Management Agency. She had no estimate for when power would be fully restored, but said it appeared to be coming back in some parts of the state.

Workers from Manhattan office buildings milled in the streets in late afternoon, evacuated from their offices but stuck by a powerless subway system.

Verizon

(VZ) - Get Report

, the biggest local phone provider in the Northeast, said its land-line network was operating normally, although call volume was extremely high.

Blackouts also were reported in Cleveland and Ottawa.Airport service to and from all New York airports, aswell as those in Cleveland, Detroit, Toronto andOttawa, was grounded, according to San FranciscoInternational Airport spokesman Henry Thompson.Controllers were busy rerouting flights, according tonews reports.

Wire services reported that the city would activate emergency patrols after nightfall. Cell-phone service also was interrupted.

"Our advice is to go home, open up your windows,drink a lot of liquids," Bloomberg advised.

Gridlock

The outage appeared to underscore how old andinterconnected the power grid is on the East Coast.Niagara Mohawk, a National Grid USA company, provideselectric service to approximately 1.5 millioncustomers, and natural gas to approximately 540,000customers in upstate New York. The company is based inSyracuse, N.Y. Its parent company also has electricitydistribution operations in New England.

"This appears to be an overloaded transmissiongrid," said Chris Edmonds, director of research forNew Orleans-based energy research Pritchard CapitalPartners and a contributor to

RealMoney.com

. Thetransmission grid encompasses the high-voltage wiresrunning from power plants.

"The transmission grid is very tight, meaning it'sold, its antiquated and it was really never built to carry the peak loads on a very hot day to allthe people and all the businesses that are now in theNortheast Corridor," he said, estimating parts of itare 30-plus years old.

The entire power grid in the U.S., with theexception of Texas, is connected, Edmonds continued.If the conditions are right -- such as on Thursday, withpeak demand for air conditioning in the late afternoonon a warm day -- the system can become overloaded andtrigger various safety "trips," he said.

"At least for right now, it looks like that whathappened," he concluded.

Ironically, the New York Independent System Operator issued a report just three months ago with the headline, "New York state electricity supply adequate for 'normal' summer weather." The report called for the approval of 5,000 to 7,000 megawatts of new generating capacity in the next five years to maintain a reliable supply of electricity and keep prices competitive.

William J. Museler, president and CEO of NYISO, said New York still has "a long way to go to resolve what remains a serious, ongoing energy shortage." NYISO is a not-for-profit corporation established in 1999 to facilitate the restructuring of the state's electric industry. The agency adminsters the state's wholesale energy markets and operates New York's high-voltage electric transmission system.

A Third Strike

And it isn't the first time New York has beenswept up in a massive blackout. The city fell victimto two major blackouts before, both of which affectedstock market trading.

On Tuesday, Nov. 10, 1965, at 5:28 p.m., ablackout shut down the city. The following day, theNew York Stock Exchange delayed its open until 11:05a.m. The NYSE didn't open for trading on Thursday,July 14, 1977, due to the second major power outage.

Nonetheless, both disruptions were mere blips thatdidn't have any major implications on the markets.

Staff writers Troy Wolverton, Stephen Schurr, Chris Nichols and Aaron Task contributed to this report