By Kate Gibson

The spread of swine flu had stock analysts on Monday drawing comparisons to the 2003 outbreak of Severe Acute Respiratory Syndrome, or SARS, but they also downplayed the idea of major market disruption from the latest outbreak.

"Swine flu has the potential to become a significant global market mover if it were to develop into a global pandemic. However, it is still too early for this," said Lars Christensen, chief analyst, Danske Bank.

On Wall Street, U.S. stocks vacillated as better-than-forecast results from Humana Inc. (HUM) and General Motor Corp.'s (GM) strategy to trim $44 billion in liabilities helped in neutralizing worries that swine flu would dent the economy. In early afternoon trade, the Dow Jones Industrial Average (DJI) stood at 8,083.70, up 7.41 points. The S&P 500 Index (SPX) was virtually flat to stand at 865.34, while the Nasdaq Composite (RIXF) also held steady at 1,695.07.

The deadly outbreak that has killed more than 100 people in Mexico has spread to the United States, where 20 Americans have caught the disease, and to Canada, where six people are infected. .

"Over the coming weeks swine flu is likely to either fade away as a market theme or escalate into an all-consuming market driver depending on whether or not it develops into a pandemic in the U.S. and/or other industrialized countries," said Christensen, who noted significant drops among airline stocks on fears the flu might reduce international travel and trade activity.

Disrupting travel, trade and the workplace, the SARS outbreak in 2003 lasted six months and killed 775 of the 8,000 people infected in 25 countries.

It had a significant, albeit short-lived negative impact on Asian financial markets, though the global economic impact of SARS proved quite limited, the analyst noted.

"At this stage, it is near impossible to assess the global macro-economic impact of swine flu, but our main scenario is that the impact will be relatively limited, as was the case with SARS in 2003," said Christensen.

"We are sympathetic to the idea recalling the impact of bird flu on Asian GDPs during that scare and so understand the market's temperament with the initial headlines about various cases being found in the U.S.," said David Ader, U.S. government bond strategist at the Royal Bank of Scotland.

The Asian Development Bank said SARS cost East and Southeast Asia $18 billion or 0.6% of GDP - 2.6% for Hong Kong, and 2% for Singapore for the first part of 2003, said Ader.

"The concern is that the flu becomes a very serious and disruptive pandemic. The last major flu pandemic scare was SARS. We expect some food export restrictions until this flu attack clears," Frederic Dickson, chief market strategist at D.A. Davidson & Co.