The busy commuter hub was evacuated after the man allegedly threw a backpack at an Amtrak agent and said it was a bomb, said Marissa Baldeo, a spokeswoman for New York City Transit. The threat was a false alarm, and service on all lines was soon restored.
Police arrested the man, Raul Claudio, 43, on Sunday, according to Manhattan District Attorney's office spokeswoman, Barbara Thompson. He was arraigned Monday on charges of making terrorist threats and falsely reporting an incident. Each count carries a sentence of up to seven years in prison.
Prosecutors said Claudio has a prior conviction for drug dealing.
The jitters continued Monday when several buildings in downtown Brooklyn were emptied for about two hours after witnesses reported seeing a black canvas attache case next to a fire hydrant. Subway service was halted at one nearby station.
Police removed the attache case and said it contained personal belongings.
The incidents came days after a second bombing attack on London's commuter system prompted New York police to start random inspections of subway riders' bags. Authorities in New Jersey began similar searches Monday.
Meanwhile, an apparent bomb hoax forced a Southwest Airlines flight to return to Bob Hope Airport in Burbank, Calif., on Sunday.
The afternoon flight had been headed to Phoenix. Authorities said a caller from the Phoenix area said a bomb was aboard the plane. It returned to Burbank and the crew and 120 passengers aboard were evacuated.
A Southwest spokeswoman said police searched the plane but found nothing. Southwest brought in another plane to take passengers to Phoenix.
CBS News Correspondent Peter Maer reports Homeland Security Secretary Michael Chertoff said Monday the events in London and Egypt are reminders of the kinds of threats "that continue to plague the civilized world."
Chertoff said the general state of preparedness in the U.S. has risen and "code yellow (elevated threat) is now a more robust color than it was perhaps a year ago."
The nation's transit systems remain on code orange (high threat level) following the latest overseas attacks.
Pointing to the need for a balanced approach to homeland security, Chertoff said while the government must remain flexible, "we will lose this war if we turn ourselves into a fortress."
Tim Allen, a Londoner headed from New York to Boston, said he endured similar false alarms recently in London. "This is the second time this has happened in two and a half weeks to me," he said.
The incident was over as quickly as it began. One minute, camouflage-clad soldiers were shouting, "Penn Station is closed indefinitely," and the next minute they got the all-clear and started letting people back into the station.
The service disruption affected Amtrak, the Long Island Rail Road, New Jersey Transit and the Seventh and Eighth Avenue subway lines.
Also Sunday, a double-decker Gray Line tourist bus was evacuated in midtown Manhattan after a bus company supervisor told police that five male passengers with backpacks and "stuffed" pockets had raised her suspicions. Police handcuffed five men and searched about 60 passengers before determining there was no threat.
Authorities in New Jersey began searching the bags of bus and train riders on Monday, although acting Gov. Richard J. Codey said last week there is no specific threat about attacks against the state.
About 800,000 passenger trips are recorded every weekday on NJ Transit, with about a half-million on buses, 230,000 on trains, and the rest on light rail.
Travelers who refused the searches would not allowed to ride.
The American Civil Liberties Union said the inspections violate protections against unreasonable searches. Edward Barocas, legal director of the group's New Jersey chapter, said it was too early to determine what, if any, action the group would take.
Terrorism expert Jessica Stern told CBS News' The Early Show that "there are measures that can be taken" to protect ourselves from attacks, but she's not sure searching bags is the best idea.
"I must say that observing what's going on in New York now, I do wonder whether it would behoove them to try what the state police are doing at Logan Airport [n Boston], which is trying to determine behavioral profiling, indicators, rather than looking in people's bags."