By Alistair Bell
MEXICO CITY (Reuters) - A new virus has killed up to 149 people in Mexico and world health experts moved closer on Monday to declaring it the first flu pandemic in 40 years as more people were infected in the United States and Europe.
The World Health Organisation raised its pandemic alert for the new flu strain to phase 4, indicating a significantly increased risk of a global outbreak of a serious disease.
The last such outbreak, a "Hong Kong" flu pandemic in 1968, killed about 1 million people.
Although deaths have only occurred in Mexico, the new flu virus has infected more than 40 people in five states in the United States, including 20 at a New York City school.
Reeling from a crisis that is threatening to slash tourism and trade, Mexico said it would not order a mass closure of businesses to try to contain the infection. "Economic activity must continue," Labour Minister Javier Lozano told reporters.
The streets of Mexico City, which is bearing the brunt of the crisis, were a sea of blue surgical face masks as most residents preferred to cover up against infection than stay home from work. Cafes, bars, gyms and even law courts were closed, however, and the city was eerily quiet.
Mayor Marcelo Ebrard stopped short of closing the packed subway system, saying: "We have to exhaust every avenue before we resort to a complete economic paralysis of the city."
The virus is not caught from eating pig meat products but several countries banned U.S. pork imports. Airline stocks were hit as investors worried about the impact on travel.
Spain became the first country in Europe to confirm a case of swine flu when a man who returned from a trip to Mexico last week was found to have the virus.
Texas confirmed six cases of the flu and California has 11 people infected. Canada has six cases, all of them mild.
Health Minister Jose Angel Cordova said the first case that alerted authorities to a possible rogue flu strain appeared in the southern state of Oaxaca but he said it was too early to identify the cause or geographical source of the virus.
Mexican media has speculated the flu may have originated at a pig farm in the tropical southeastern state of Veracruz.
CAPITAL HUSHED
As the death toll in Mexico rose to up to 149, and Cordova warned the figure would keep rising, Britain, France, Germany and the United States urged against non-essential travel to Mexico, which relies on its huge tourism industry as its No. 3 source of foreign currency.
Airlines, which fly more than 1 million passenger seats in and out of Mexico's international airport every week, checked passengers for flu symptoms, and many wore masks on board.
Worldwide, seasonal flu kills between 250,000 and 500,000 people in an average year. The new strain is worrying as it spreads rapidly between humans and there is no vaccine for it.
Most of the flu fatalities were aged between 20 and 50, an ominous sign because a hallmark of past pandemics has been the high rate of fatalities among young adults.
Fearful Christians paraded a centuries-old statue of Jesus through Mexico City on Sunday to ask for protection as life in the normally hectic capital of 20 million people wound down to a murmur.
Cinemas were shut and a premiere of the "X-Men Origins: Wolverine" superhero movie, where brawny Australian actor Hugh Jackman was due to walk the red carpet, was scrapped.
Nationwide, 33 million schoolchildren will stay home as Mexico cancels classes until May 6 to contain the outbreak.
Analysts say the flu crisis could shave more than half a percentage point off Mexico's already recession-bound economy this year from the dent to retail and tourism.
Globally, oil prices fell more than 2 percent as investors feared a new blow to an already fragile global economy. The MSCI world equity index fell 0.8 percent and U.S. stocks, especially in the airline and leisure sector, slipped.
Shares in makers of drugs and vaccines, such as Roche, were higher.
A string of countries including Australia, France, Germany, Norway, Sweden, Israel, Guatemala, Costa Rica and South Korea were testing suspected cases of the Mexican flu.
Spain had 26 suspected cases under observation and a New Zealand teacher and a dozen students who recently travelled to Mexico were being treated as likely mild cases.
In the first confirmed cases in Britain, Scotland's health minister said two people tested positive for swine flu and were being treated under isolation near Glasgow.
(Additional reporting by Jonathan Lynn and Stephanie Nebehay in Geneva, Maggie Fox in Washington, Catherine Bremer, Helen Popper, Robin Emmott and Mica Rosenberg in Mexico City; Editing by Bill Trott)
