NEW YORK — The swine flu gave Wall Street a reason to turn cautious.
The Dow Jones industrial average gave up a midday recovery and retreated about 0.6 percent Monday as the swine flu’s death count in Mexico grew to about 150 people from 100.
There have been far fewer cases reported elsewhere, including the United States and no other fatalities. Investors were also mindful of previous health scares that had only short-term jostling effects on the market including bird flu, mad cow disease and the West Nile virus — none of which ever escalated to into global pandemics.
Still, Wall Street hedged its bets as the U.S. cases of swine flu doubled to about 40.
Ryan Larson, senior equity trader at Voyageur Asset Management, said the flu was a “wild card” for the market. “It’s still a little bit early to go into panic mode, but it’s definitely something that needs to be watched closely,” he said.
Airline and other travel-related stocks suffered the sharpest losses Monday.
The European Union health commissioner advised Europeans to avoid nonessential travel to Mexico and the United States, but the Centers for Disease Control and Prevention in Atlanta said the recommendation was unwarranted.
Craig Peckham, market strategist at Jefferies & Co., called the flu an “easy excuse” for investors to cash in any profits they made in recent weeks. The Dow stalled last week, but remains up about 23 percent since its nearly 12-year low on March 9 after better-than-expected earnings and economic reports.
The Dow’s losses were mitigated by General Motors, which said it will cut 21,000 jobs by next year and ask the government to exchange GM debt for stock.
The Dow fell 51.29, or 0.6 percent, to 8,025.00.
Broader stock indicators also closed lower. The Standard & Poor’s 500 fell 8.72, or 1 percent, to 857.51, and the Nasdaq composite fell 14.88, or 0.9 percent, to 1,679.41.
The Russell 2000 index of smaller companies fell 9.21, or 1.9 percent, to 469.53.
In anticipation of an economic turnaround, many investors like Robert Pavlik, chief market strategist at Banyan Partners, said they have been paring back on traditionally safe stocks like consumer staples and buying more financials and consumer discretionary stocks.
“We are in a downturn, in this slowing economic phase, but it’s not as bad as people originally perceived,” Pavlik said. “What we’re telling our clients is: Don’t focus on the last three months.”
