Mexican indigenous people wear protective masks as they walk along Reforma avenue in Mexico City yesterday.

WASHINGTON: The World Health Organisation prepared yesterday to raise the pandemic threat level from swine flu to phase 5 as the virus spread and killed the first person outside Mexico, a toddler in Texas.

“Things are moving fast,” a WHO source told Reuters.

Nearly a week after the H1N1 virus, or swine flu, first emerged in California and Texas and was found to have caused deaths in Mexico, Spain reported the first case in Europe of swine flu in a person who had not been to Mexico, illustrating the danger of person-to-person transmission.

Phase 5 is the WHO’s second highest level of warning that a pandemic, or global outbreak of a serious new illness, is imminent.

“It is clear that the virus is spreading and we don’t see evidence of it slowing down at this point,” Dr. Keiji Fukuda, WHO acting assistant director-general, told a news briefing.

In Mexico, where up to 159 people have died from the virus and around 1,300 more are being tested for infection, people struggled with an emergency that has brought normal life virtually to a standstill.

“I’m depressed. I don’t understand where this came from, how it spreads, how long it will last or what it will to the economy,” an elderly woman named Licha said, sitting on a Mexico City park bench and wearing a surgical mask.

Germany and Austria reported cases, bringing the number of affected countries to 9. Fukuda said the WHO was moving closer to raising its pandemic alert to phase five, meaning a pandemic is imminent. Phase 6 means a pandemic has begun.

US officials said a 22-month-old boy had died in Texas—the first confirmed US swine flu death—while on a family visit from Mexico.

Dr. Richard Besser, acting head of the US Centers for Disease Control and Prevention, said the country now had 91 confirmed cases in 10 states from New York to California. “We’re going to find more cases. We’re going to find more severe cases and I expect that we’ll continue to see additional deaths,” Besser said.

President Barack Obama, who must manage the sudden flu emergency along with his broader drive to pull the United States out of its deep recession, said the Texas death showed it was time to take “utmost precautions” against the virus.

Despite jitters, many global markets rose as traders sought hopeful signs through the gloom of the worldwide financial crisis.

Airline shares, which had fallen on Monday and Tuesday, rallied on expectations that the outbreak may not significantly crimp travel demand and U.S. pork futures recovered on the Chicago Mercantile Exchange as health officials hammered home the message that there was no danger posed by pigs or pork products.

“The market doesn’t seem to be affected by this too much,” said Cleveland Rueckert, market analyst at Birinyi Associates Inc. Stamford, Connecticut.

“Swine flu makes a good news story, but to be honest doesn’t seem it’s been as bad as some of the press has made it seem to be.” In some places, however, it was already bad. Mexico’s central bank warned that the outbreak could push the country deeper into recession, hurting an economy that already shrank by as much as 8 percent in the first quarter. France said it would seek a European Union ban today on flights to Mexico . Argentina and Cuba have already stopped flights from Mexico.

The EU, the United States and Canada have advised against non-essential travel to the popular tourist destination, as nearly all the cases so far, in Canada, New Zealand, Israel and Spain, have been linked to travel from Mexico.

The WHO’s Fukuda said the Spanish case—involving a person who had reportedly been in contact with someone who visited Mexico but not traveled there themselves—suggests the virus is spreading more easily among people.

“There are cases which are occurring in people who have not traveled,” Fukuda told a briefing, saying the WHO was closer to raising its pandemic alert another notch.

H1N1 swine flu poses the biggest risk of a pandemic since H5N1 avian flu re-emerged in 2003, killing 257 people of 421 infected in 15 countries.

In 1968 a “Hong Kong” flu pandemic killed about 1 million people globally, and a 1957 pandemic killed about 2 million. The new strain contains genetic material from avian, swine and human viruses and appears to have evolved the ability to pass easily from one person to another. It cannot be caught from eating pork products but Egypt ordered all its pigs to be slaughtered and some countries, led by Russia and China, have banned U.S. pork imports.

Obama’s newly confirmed Health and Human Services Secretary Kathleen Sebelius held her first news conference yesterday seeking again to reassure the public

“We are determined to fight this outbreak and do everything we can to protect the health of every American,” she said, adding that work also move speedily on a vaccine, although some experts said this could be tricky.

The outbreak has deeply affected life in Mexico and ravaged tourism.