Reeling from a rash of drug-world violence and the effects of the global recession, Mexico's tourism is now taking a beating from the swine flu outbreak that is suspected in the deaths of 149 people and prompted the closing of theme parks, soccer stadiums and other public places.
The country's benchmark IPC stock index plunged 3.3% on Monday, and the peso slumped as the ramifications of the outbreak filtered through the business and tourist community.
Adding to the country's woes, an earthquake with a magnitude of 5.6 struck central Mexico on Monday, rattling the nerves of residents. Two elderly people died of heart attacks apparently related to the temblor.
On Wall Street, U.S. blue-chip stock indexes were modestly lower, suggesting that investors didn't expect the swine flu to become a global crisis that could further deepen the recession. The Dow Jones industrial average slipped 51.29 points, or 0.6%, to 8,025.00.
But the average New York Stock Exchange issue slid 1.4%, weighed down by steep losses in airline, hotel and cruise line stocks, and by another pullback in financial shares.
Mexico ranks as the world's 10th-most-visited tourist destination, with more than 22.6 million international visitors last year. With the swine flu outbreak, national museums have been closed, restaurants are empty, soccer stadiums vacant, tourist attractions are blocked by soldiers and streets teem with anxious residents donning surgical masks.
"Of course, the Mexican tourism sector is going to be one of the most affected sectors in the country, and this is going to add to the pressures on the economy," said Eugenio J. Aleman, a senior economist for Wells Fargo & Co. "My first reaction is that this is not going to be terribly bad for the Mexican economy because things are already bad."
The U.S. recession and a spate of drug war shootings already have put the country's economy in a downward spiral, he said.
Although Mexico's IPC stock dropped 755.06 points, or 3.3%, to 21,827.11, it was down as much as 5.1% at its low for the session.
Because of the swine flu outbreak, U.S. Homeland Security Secretary Janet Napolitano declared a public health emergency Sunday and the Centers for Disease Control and Prevention issued a "travel health precaution," urging Americans to avoid nonessential travel to Mexico. The European Union health commissioner issued a similar warning for Mexico and parts of the U.S.
