WASHINGTON (Reuters) - More than 40 people in five states have been sickened by new strain of swine flu that doctors fear may cause a pandemic, U.S. officials said on Monday, promising more cases to come.

Schools were ordered closed in California and Texas, while nervous investors sent U.S. stock prices tumbling on expectations that the flu outbreak could further undermine the economy, which is struggling in recession.

President Barack Obama said he was monitoring the situation while bad news piled up from southern neighbor Mexico, where up to 149 people have died and more than 1,600 have been infected by the never-before-seen virus.

The U.S. government on Sunday declared the flu strain a public health emergency -- a fresh challenge for the Obama administration, which is still mindful of the damage inflicted on his predecessor George W. Bush over his government’s inept handling of Hurricane Katrina in 2005.

No American deaths have been reported and most affected by the virus had light symptoms, recovering fast. But it has popped up in New York, Ohio, Kansas, Texas and California as well as Canada and Europe, raising fears of a pandemic.

“This is obviously a cause for concern and requires a heightened state of alert. But it is not a cause for alarm,” Obama told a meeting of the National Academy of Sciences.

In New York City, Mayor Michael Bloomberg said more than 100 sick students at a high school in Queens were being tested and that 45 were confirmed or likely cases of swine flu.

“We believe that there are probably more than 100 cases of swine flu at the school and lab tests are confirming what we have suspected,” he told a news conference.

A first case was confirmed in northern California, where a student was found with the virus at a school in a Sacramento suburb. The school was closed. Ten other cases have been confirmed in southern California close to Mexico’s border.

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Texas, meanwhile, confirmed a third case of swine flu near San Antonio. All three cases involve students at the same school, and Texas officials have closed 14 area schools in an attempt to contain it.

Department of Homeland Security chief Janet Napolitano said inspections were being boosted at U.S. borders and airports, while the national stockpile of antiviral drugs was being activated and should be fully deployed by May 3.

The U.S. State Department urged Americans on Monday to avoid all “nonessential” travel to Mexico over the next three months because of the flu outbreak.

NO HEALTH SECRETARY

The flu scare comes as the Obama administration seeks to fill a number of senior health vacancies.

Obama’s choice for health secretary, Kansas Gov. Kathleen Sebelius, has not yet been approved by the Senate where some Republicans are upset over her support for abortion rights, but Democrats hope Sibelius will get the nod soon.

“There is no time to play politics when it comes to the health and safety of our citizens,” Democratic Representative Rosa DeLauro said in a statement.

Centers for Disease Control and Prevention acting director Dr. Richard Besser said the rising New York total represented testing of the affected students, not ongoing transmission.

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But he said officials expect to see more cases and possibly more severe infections as surveillance intensifies.

“I wouldn’t rest on the fact that we have only seen cases in this country that are less severe. I would expect that the spectrum of disease would expand,” Besser told a briefing.

“This virus is acting like a flu virus and flu viruses spread from person to person,” he said.

The White House took pains to emphasize that one person -- Obama himself -- was not at risk.

While a Mexican museum director who guided Obama during his recent April 17-18 trip to the country subsequently died, the White House issued a statement on Monday saying this death was due to pre-existing condition and not swine flu.

Besser said officials did not believe any of the existing flu vaccines would be effective against the new strain. The CDC has been starting the groundwork to make a new vaccine.

PIGS NOT AFFECTED

The virus is widely being called swine flu although it has components of classic avian, human and swine flu viruses and has not actually been seen in pigs.

Despite that, six countries banned the import of meat and pork products from some parts of the United States, the U.S. Trade Representative’s office said, saying the bans “do not appear to be based on scientific evidence.”

The meat bans -- which followed a warning by the European Union health chief against travelers visiting areas hit by swine flu -- looked likely to fuel concern of wider U.S. economic impact from the flu outbreak

White House spokesman Robert Gibbs said the U.S. Treasury was looking at potential fallout, although it was too early to put any numbers on it.

U.S. lawmakers plan to hold hearings this week to examine the federal government’s response to the flu outbreak with some health experts critical of the government’s long-term preparations for possible pandemics.