12 Stocks to Watch in the Swine Flu Crisis

Updated May 1.

Just when investors thought they had seen it all, a potential global pandemic is rocking markets across the world. Forget unprecedented government bailout plans for the financial sector, Chrysler's bankruptcy, terrorist attacks overseas and dismal corporate earnings. Now comes word this week that a swine flu epidemic, which likely started in Mexico earlier this month, has spread across the globe. The scare is causing volatility throughout the world's stock markets.

Health epidemics can seem straight out of Hollywood -- until they show up in your town. It's hard for most people to imagine that their lives can be put in jeopardy by something that happened on the other side of the world simply because one person got on a plane without knowing he was sick. That was surely the case with the SARS and bird flu epidemics earlier this decade that started in Asia and China and quickly threatened the U.S., only to seemingly disappear as soon as they showed up.

This time around ground zero is closer to home -- and the potential impact much more severe. Mexico officials are centering on a small town located near a pork processing plant where the possible first patient lived. Reports now say 159 people in Mexico who have died recently are being investigated for a connection with the virus. In the U.S. the Centers for Disease Control reportedly said Friday 141 cases in 19 states were confirmed, up from 109 cases in 11 states on Thursday. In Los Angeles County health officials were investigating two deaths in California possibly linked to the virus. There is no way to tell yet how accurate those numbers are. The World Health Organization raised its alert to its second-highest level, one short of indicating a global pandemic. Earlier it warned "this is a public health emergency of international concern" and said sustained human-to-human transmission was happening.

Besides sharing a common border, Mexico is a big trading partner with the U.S. and a gateway to South America. Its resorts are also a hot spot for tourists. As governments warn on international travel to the area, the situation is impacting hotel chains, cruise ship companies and airliners. "The escalation of the swine flu could lead to more drastic developments that could hurt the already soft global economy," said Hamed Khorsand, an analyst at BWS Financial.

Here is a look at the stocks that could be impacted by the epidemic -- and a few that could come out of it on the winning side.

Photographs by Getty