A Mexican toddler in Texas has died of the new swine flu virus, the first confirmed death outside Mexico, as the World Health Organization said the outbreak showed clear signs of spreading around the world.

Nearly a week after the threat first emerged in Mexico, Spain reported the first case in Europe of swine flu in a person who had not been to Mexico, underscoring the threat of person-to-person transmission.

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.

With Germany and Austria reporting cases, bringing the number of affected countries to 9, Fukuda said the WHO was moving loser to raising its pandemic alert to phase five, the second highest level possible.

U.S. officials said that a 22-month-old boy had died in Texas -- the first confirmed U.S. swine flu death -- but they added that he was on a family visit from Mexico, where up to 159 flu fatalities have been recorded.

Dr. Richard Besser, acting head of the U.S. 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 on Tuesday asked for $1.5 billion in emergency funding to fight the disease, said the death showed it was time to take utmost precautions against the virus.

Wall Street opened higher on Wednesday even as data showed the U.S. economy shrank at a steeper pace than expected and traders looked beyond flu fears for hopeful signs that the recession may be abating.

Financial markets are keeping an eye on the spread of the virus, but so far the economic impact has largely been confined to the tourism and pharmaceutical industries.

Unless a significant number of deaths start to be reported from a number of countries, raising the possibility of an even slower recovery from recession, analysts predict the impact on stock, bond and currency prices is likely to be limited.

TOURISM HIT

France said it would seek a European Union ban on Thursday 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 said there was no plan now to call an emergency committee meeting to raise the pandemic alert level, which could take place if it were confirmed that infected people in at least two countries were spreading the disease to other people in a sustained way.

The WHO's Fukuda, who earlier said the outbreak may end up as a very mild pandemic, said the report of the Spanish case involving a person who had not been to Mexico suggests the virus is spreading more easily among people.

There are cases which are occurring in people who have not traveled, Fukuda told a news briefing. What we are looking for overall is whether we see many kinds of those infections occurring that suggest transmission is occurring independent of travel.

Spain's El Mundo newspaper said the Spanish patient had recent contact with someone who had visited Mexico.

H1N1 swine flu poses the biggest risk of a large-scale pandemic since 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.

The World Trade Organization said on Wednesday it had not been told officially of any such bans, and the EU and Japan said they would not follow suit.

In the United States, where pork producers have voiced outrage over the trade bans, officials began referring to the outbreak as the 2009 H1N1 flu.

Obama's newly confirmed Health and Human Services Secretary Kathleen Sebelius held her first news conference on Wednesday 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.

SCHOOLS, PYRAMIDS CLOSED

The outbreak has deeply affected life in Mexico and ravaged tourism, a key earner. Mexico City was unusually quiet, with schools closed. Many parents took their children in to work.

All Mayan and Aztec pyramid ruins, dotted through central and southern Mexico, were closed until further notice.

Mexican Health Minister Jose Angel Cordova said more than 1,300 people were in hospitals, some of them seriously ill, out of a total of about 2,500 suspected cases.

In the last few days there has been a decline (in cases), he said. The death figures have remained more or less stable.

Seasonal flu kills 250,000 to 500,000 people in a normal year, including healthy children in rich countries.

Health agencies advise frequent hand-washing and covering sneezes and coughs to help stop the spread. Experts generally agree that face masks, especially the surgical masks seen on the streets of Mexico City, offer little protection.

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