On 9 April 1942 the unescorted and unarmed Atlas (Master Hamilton Gray) steered a non-evasive course off Cape Lookout, but after hearing a diesel engine swung her stern toward the sound. With the moon rising, U-552 fired a torpedo at 2000 metres that struck the starboard side amidships at the #6 tank. The explosion threw up a cloud of smoke and water but did not ignite the cargo. The engines were stopped and the crew of eight officers and 26 men abandoned ship in three lifeboats.
The U-boat came closer and fired a second torpedo that created a fireball and caused the ship to burn from stem to stern. One lifeboat drifted into the burning gasoline on the water and the master ordered the men overboard as the fire swept over them. The third mate and an ordinary seaman drowned trying to escape the flames. The master was severely burned and the others from that boat all suffered various degrees of burns. An aircraft sighted the lifeboats at daylight and directed a US Coast Guard cutter to them, which picked up the survivors and took them to Morehead City, North Carolina.