Danny downgraded to tropical depression off U.S

WASHINGTON (Reuters) - Tropical Storm Danny weakened to a tropical depression in the Atlantic on Saturday and storm alerts were discontinued for the North Carolina coast, the U.S. National Hurricane Center said.

Danny's maximum sustained winds fell to 35 miles per hour, the hurricane center said in its 5 a.m. (0900 GMT) advisory.

The remnants of what had been the fourth tropical storm of the 2009 Atlantic season were about 80 miles southeast of Cape Hatteras, North Carolina, and 540 miles south-southwest of Nantucket, Massachusetts.

The system was expected to move rapidly north-northeast and then northeast at 30 to 35 mph.

Forecasters said large swells from the system were expected to generate a second weekend of dangerous surf conditions and rip currents along the U.S. East Coast.

Last weekend, Hurricane Bill brought rain and heavy winds to eastern Canada after pounding the U.S. Atlantic coast with heavy seas that killed two people.

Tropical storms and hurricanes are tracked by energy traders concerned about disruptions to oil and gas production in the Gulf of Mexico and Canada's Atlantic region, and by commodities traders for damage to citrus, cotton and other crops.

Pricing of insurance-linked securities, which transfer insurance risks associated with natural disasters to capital markets investors and can be used to hedge other weather risk exposures, can also be affected by the future path of a storm.

(Writing by Peter Cooney; Editing by Louise Ireland)