The death toll has risen to more than 100 in Mexico and cases have been reported in the United States, Canada, Spain and New Zealand.

"Equity and commodity markets have been heading lower overnight with concerns over the impact a potential swine flu pandemic could have on the global economy overhanging sentiment," said Colin Cieszynski, market analyst at CMC Markets.

The Dow Jones industrial average is down 75 points to 7999, the S&P 500 is down 8 points to 857 and the Nasdaq is down 16 points to 1677. In Canada, the S&P/TSX composite index is down 151 points to 9393.

European stock markets are also lower, with the Stoxx 50 down 16 points to 1967, the UK FTSE 100 down 31 points to 4125 and the German DAX down 61 points to 4613.

WTI crude oil is down $3.44 to $48.11. The front month gold contract at the Chicago Board of Trade is down $5.90 to $908.10 per ounce.

The other story motivating markets is a General Motors offer to debt holders. GM is offering creditors 225 shares for each $1,000 they are owed but will need 90% of bond holders to approve the deal before a June 1 deadline. The company also said it will cut dealerships by 42% and the automaker's unionized workforce will fall to 40,000 by the end of 2010 from 62,000 in 2008.

With stocks down, Treasuries are rallying and currency flows are driving a flight to the traditional safe havens.

The Canadian dollar is down 0.0001 to 0.8263 against the U.S. dollar (1.2105 USD/CAD) and down 0.46 to 79.87 against the yen.

The U.S. dollar is down 0.49 to 96.68 against the yen and the Dollar Index is up 0.554 to 85.271.

The euro is down 0.0125 to 1.3118 against the U.S. dollar, down 0.0136 to 1.5876 against the Canadian dollar, down 0.0047 to 0.8976 against the pound sterling and is lower by 1.84 to 126.82 against the yen.

The pound sterling is down 0.0062 to 1.4614 against the U.S. dollar and down 0.0065 to 1.7689 against the Canadian dollar.

U.S. two-year yields are down 6.6 bps to 0.89%, with five-year yields down 7.4 bps to 1.86%, 10-year yields down 6.5 bps to 2.93% and 30-year yields down 5.0 bps to 3.83%. The Eurodollar September 09 contract is up 6.0 ticks to 98.97. The yield curve is flatter, with the 10/2-year spread down 0.1 bps to 203.05 bps.

Yields on two-year Canadian government bonds are down 3.1 bps to 0.96%, with five-year yields down 5.1 bps to 1.90%, 10-year yields down 5.1 bps to 2.97% and 30-year yields down 3.6 bps to 3.73%. The September 09 BAX contract is up 1.0 tick to 99.61.

In Germany, returns on two-year German bonds are down 5.0 bps to 1.33%, with five-year yields down 5.7 bps to 2.34%, 10-year yields down 5.7 bps to 3.13% and 30-year yields down 3.6 bps to 3.94%.

Yields on UK two-year bonds are down 7.8 bps to 1.15%, with five-year yields down 6.2 bps to 2.41%, 10-year yields down 5.4 bps to 3.43% and 30-year yields down 8.1 bps to 4.27%.

All data taken at 9:39 a.m. EDT.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Sarah Sussman, This email address is being protected from spam bots, you need Javascript enabled to view it

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