Cautious traders pushed US stock prices lower in a muted reaction to a deadly swine flu outbreak, while General Motors rallied on hopes its new overhaul plan would avert bankruptcy.

In a choppy session featuring swings in both directions, the Dow Jones Industrial Average fell 51.29 points (0.64 per cent) to close at 8,025.00, yesterday.

The Nasdaq composite lost 14.88 points (0.88 per cent) to 1,679.41 and the broad-market Standard & Poor's 500 index shed 8.72 points (1.01 per cent) to 857.51.

The markets tried to assess the impact of the swine flu outbreak that has killed up to 149 people in Mexico and appeared to be spreading across continents as the World Health Organization (WHO) raised its flu pandemic alert level from three to four.

The outbreak "is certainly serving as an effective profit-taking catalyst," said Patrick O'Hare at Briefing.com.

David Kotok at Cumberland Advisors said he expects "the flu to be a negative shock that comes on top of an already-weakened economic and financial system."

The US market's losses were limited as traders kept calm despite heavy selling in other bourses, according to Jon Ogg at 24/7 Wall Street.