By Nick Zieminski and Lynn Adler

(Reuters) - Hurricane Sandy has caused tens of billions of dollars in damage up and down the U.S. East Coast, but the recovery and reconstruction spending that will follow could pump an almost equal amount right back into the economy, driving a rally for some stocks as markets reopened on Wednesday.

Companies such as environmental cleanup specialist Clean Harbors Inc , building supply chains Home Depot Inc and Lowe's Cos Inc , building products makers Owens Corning and Beacon Roofing Supply Inc , and generator manufacturer Generac Holdings Inc surged in early trading on the assumption that the recovery from Sandy will take years and boost sales.

Lumber futures also soared, hitting daily limits and shutting trading at 19-month highs.

Economists and insurers call the phenomenon "demand surge," or the increased cost to repair or replace damaged property after a disaster, when people are competing for a limited supply of resources in a way that boosts prices.

University of Maryland professor Peter Morici estimated this week that reconstruction spending might equal 80 percent of the total economic losses caused by Sandy.

Others suggested the effects will trickle all the way down to mass-market retailers.

"I'm looking for a pronounced paycheck cycle from Wal-Mart in the next couple of the weeks," said NBG Productions chief equities analyst Brian Sozzi, speaking of the phenomenon in which shoppers at the discounter are living paycheck-to-paycheck and sales spike at the beginning of the month.

EARLY WINNERS

At last count nearly 6 million customers were still without power because of Sandy, which took dozens of lives and left many waterfront communities in ruins.

"(It's) very hard to predict how (the storm's effect) will play out, but it generally leads to a little increase in business," Sandy Cutler, chief executive of manufacturer Eaton Corp , said on a conference call on Wednesday.

Investors agreed that people should not read much into share moves on Wednesday because of low trading volume, as well as market closures on Monday and Tuesday.

"There are several days of news that have been compressed into a single trading day," said Lawrence Creatura, manager of the Federated Clover Small Cap Fund.

But one early winner, if such a thing is possible at a time like this, is the freight industry. Airport and rail closures have forced companies such as drug manufacturers to seek alternative methods of transport to get products to market.

"This is probably close to a $2 billion revenue opportunity for truckers," said Noel Perry, principal of Transport Fundamentals in Cornwall, Pennsylvania. "It's a pricing opportunity because there are shortages and because products need to be expedited."

Solar system installers with big businesses on the East Coast could also benefit from rebuilding, according to Raymond James analyst Pavel Molchanov. He named Real Goods Solar Inc and privately held SolarCity and Astrum Solar, specifically, as potential winners.

American Superconductor Corp , whose products support the power grid infrastructure, and energy services company Ameresco Inc could also see an uptick in business, Molchanov added.

Generator makers such as Generac also stand to profit handsomely from a renewed focus on backup power.

"We have shipped a lot of products to the East Coast and we will see an improvement in the fourth-quarter results as a result of shipping a lot of these products," Generac Chief Executive Officer Aaron Jagdfeld said in an interview. "We have sold tens of thousands ... Tens (of) thousands of portable generators have been shipped to the East Coast."

EARLY COSTS BITE

Although it is far too early to know precisely what damage Sandy has done, early estimates suggest insured losses of from $5 billion to $15 billion and total economic losses from $20 billion to as much as $45 billion.

FedEx Corp , which is starting to resume services disrupted by Sandy, was the first airline to land at Newark airport after it opened for traffic on Wednesday. The No. 2 package delivery company is still assessing the costs of hurricane-related service changes.

"We moved over 50 aircraft out of the area and normal flight operations have been restored," said Paul Tronsor, managing director of global operations control at FedEx Express.

United Parcel Service Inc , the world's largest package delivery company, said it did not appear to have any vehicles or aircraft with serious damage. With power out in many areas in the U.S. Northeast, the company has set a safety curfew for vehicle drivers to return to buildings before dark.

U.S. airlines, which have canceled nearly 20,000 flights from Sunday through Wednesday, will lose millions in revenue because of the travel shutdown, analysts estimated.

Ray Neidl, an analyst with Maxim Group, said the effects from Sandy will be worse than other storms that slowed air travel, given the ground damage at key hubs such as LaGuardia.

The airlines with the most exposure to the U.S. Northeast include New York-based JetBlue Airways Corp , which has a big hub at JFK; Delta Air Lines Inc , which recently expanded flights at LaGuardia and has a JFK hub; and United Continental Holdings Inc , which has a major hub at Newark.

Major rail companies are also still struggling to get operations up to speed.

CSX Corp said it had completed inspections and was restoring some service in the region, but not between Philadelphia and Albany, N.Y. It said shipments will be delayed three days or more. Norfolk Southern Corp is telling customers to expect delays through the end of the week.

The shares of insurers came under some pressure as trading reopened, with Travelers Cos Inc , Chubb Corp and Allstate Corp all down early on fears they could be among the most exposed to losses.

But analysts said there was so much extra capacity in the insurance industry that the losses were unlikely to do much more than slash fourth-quarter earnings. Morgan Stanley analyst Gregory Locraft cut earnings estimates for property insurers an average of 26 percent based on the expected cost of Sandy.

INDUSTRIALS, RETAILERS HURT

The storm also swept across the Marcellus shale basin, which runs across a few northeastern states and accounts for roughly a tenth of U.S. natural gas production. At least one company that drills there, Royal Dutch Shell Plc , said it was restarting production after suspending it for safety reasons.

Industrial companies with New Jersey outposts continued to have power problems on Wednesday. Dow Chemical Co said a research and development site in Bound Brook, N.J., remains without electricity and a Styrofoam plant in Pennsauken, N.J., is operating at reduced rates.

Some retailers were also struggling to get all of their stores reopened, in some cases because of physical damage and in others because they simply could not get staff in place.

Sears Holdings Corp said it still had 66 stores closed as of Wednesday morning, with plans to hook some stores up to generators to get them open. Similarly, Wal-Mart Stores hoping to have most of them open by the end of the day.

(Additional reporting by David Randall, Dhanya Skariachan and Ernest Scheyder in New York, Karen Jacobs in Atlanta, Jessica Wohl and Brad Dorfman in Chicago, Nichola Groom in Los Angeles, Braden Reddall in San Francisco and Mridhula Raghavan in Bangalore; Writing By Ben Berkowitz; Editing by Tim Dobbyn, Dan Grebler and Andre Grenon)