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How Flu Fears Will Crimp Spending—and Where

The threat of a widespread swine flu outbreak weighed on the markets Monday, and for good reason: Even if the virus is contained, it's still likely to put a crimp on spending for a wide array of goods.

The World Bank estimates that a global flu pandemic could cost $3 trillion and cut world GDP by 5 percent.

  • Swine Flu Spreads and Dampens Economic Outlook

According to Reuters, an outbreak of the SARS respiratory virus in 2003, which was largely limited to Southeast Asia, cost that region's economy around 0.6 percent of GDP.

Already the economic effects of swine flu are being seen. Six countries have banned imports of all meat and pork products from parts of the U.S., even though there have been no reported cases of the virus being transmitted this way.

AP

"Restrictions on U.S. pork or pork products or any meat products from the United States resulting from the recent outbreak do not appear to be based on scientific evidence and may result in serious trade disruptions without cause,'' the U.S. Trade Representative's office said in a statement.

Meanwhile, shares of travel-related stocks such as airlines and cruise ship operators fell sharply Monday, as investors anticipated that travel to the affected areas would be disrupted.

Continental Airlines, which offers more seats in and out of Mexico than any other foreign airline, saw its shares fall more than 16 percent.

As a precaution, airports around the world have stepped up surveillance, scanning passengers with thermal cameras and sensors to detect those who may have a fever.

In Mexico City, consumers are largely staying home in an attempt to avoid the flu, and the government has ordered all schools closed until May 6. Some businesses are being ordered to shut down, including several Starbucks locations.

The Seattle-based coffee chain has shut down 10 cafes in Mexico City. The company has not yet confirmed whether it is true that one of its employees has the same strain of swine flu now suspected of 149 deaths in Mexico.

Meanwhile, there were reports of swindlers preying on people worried about the outbreak. Spammers reportedly flooded the Internet Monday with millions of emails trying to sell counterfeit drugs as remedies for the flu or using such pitches to steal credit card data, according to security software maker McAfee .

Some companies could legitimately benefit from the outbreak. Shares of Switzerland's Roche and Britain's GlaxoSmithKline rose Monday. The two companies make Tamiflu and Relenza, two medicines believed to be effective in the treatment of swine flu.

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