Return to Transcripts main page

CNN Live At Daybreak

Kidnappers in Iraq Promising to Release Their Philippine Hostage Today; Vote Expected in Senate Later This Week on Constitutional Amendment to Ban Same-Sex Marriage

Aired July 13, 2004 - 05:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BETTY NGUYEN, CNN ANCHOR: New this morning, clashes in Iraq, including an attack on a U.S. military convoy.
It's Tuesday, July 13, and this is DAYBREAK.

Well, good morning.

From the CNN Global Headquarters in Atlanta, I'm Betty Nguyen in for Carol Costello.

Now in the news, Manila says it will withdraw its troops from Iraq. In return, abductors of a Filipino truck driver say they will release him today. The kidnappers had threatened to behead the hostage if the troops were not withdrawn by July 20.

We'll get a live report out of Manila in just two minutes.

In other news, Britain's Lord Butler delivers a report on Iraq today to Prime Minister Tony Blair. The report on the prewar intelligence used to justify the war is expected to criticize both the prime minister and British intelligence officials. It'll be made public tomorrow.

In the U.S. Senate, debate on banning same-sex marriages resumes in just a few hours. A backer of the proposed constitutional amendment says his side is still well short of the votes needed for approval.

In five hours, a group of senators opens a hearing on the abuse of steroids by athletes. A college football player from a Division One school is expected to testify. He'll wear a hood to disguise his identity.

And this morning it's still very early, but Chad is up and raring to go, as he has the weather forecast -- good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Betty.

(WEATHER REPORT)

NGUYEN: Well, kidnappers in Iraq are promising to release their Philippine hostage today. In exchange, it appears the Philippine government is agreeing to give in to the kidnappers' demands.

Our Maria Ressa joins us now by phone from Manila with the latest -- good morning, Maria.

MARIA RESSA, CNN CORRESPONDENT: Good morning, Betty.

In the very early morning hours Tuesday on Al Jazeera television, the kidnappers of 46-year-old Angelo de la Cruz said he had been moved to the place where he would be executed. Shortly after, a Philippine official involved in the negotiations appeared on Al Jazeera again with a statement, saying the Philippines would withdraw troops "as soon as possible." That statement has caused this confusion. Will the Philippines give in to terrorist demands to pull out by July 20 or will they pull out as planned, a month later?

As Manila woke up, we were told the crisis committee was meeting. No statements for several hours. What we know for sure is that the Philippine government is aware of the developments. Officials have been asked not to comment on this issue. The presidential spokesman saying, "This is a difficult and crucial part of the negotiations for the life of Angelo de la Cruz."

All official statements will come from the secretary of foreign affairs. And just a short while ago, she gave a very short statement. She said: "When Deputy Foreign Minister Rafael Seguis spoke this morning with Al Jazeera, he spoke with foreknowledge and the full authority of the Philippine g."

Back to you -- Betty.

NGUYEN: So despite this confusion, the hostage is supposedly going to be released today.

Any indication as to where or when?

RESSA: At this point, all of that is unclear. And the Philippine government and the negotiators are not releasing any further information. All they say is that they're in a very delicate and critical part of the negotiations but that they still remain hopeful of his -- for his release.

NGUYEN: All right, Maria Ressa.

Thank you for that report out of Manila.

Back in Iraq, there was another attack, on U.S. troops this time. Insurgents targeted an American convoy in Baghdad. One American soldier was injured in that attack. It happened just a short time ago and these pictures are just in to CNN from that scene.

To keep up with you -- or for you to keep up on Iraq and all the developments there, you can just log onto the computer. For more on these latest attacks and the Philippine troop situation, just go to cnn.com.

Well, a vote is expected in the Senate later this week on a constitutional amendment to ban same-sex marriage. Supporters may not have enough votes to pass the controversial measure.

But, as CNN congressional CNN's Ed Henry reports, the timing of the vote may be a bigger issue than the amendment itself.

(BEGIN VIDEOTAPE)

SEN. NICK SANTORUM (R), PENNSYLVANIA: I can't think of anything more important than the basic social building block of our country. That's what marriage is. That's what the family is. And it is in jeopardy. It is in serious, real jeopardy as a result of what the courts are doing.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I celebrate marriage. I understand the difficulties in working to keep it together but I really believe that this is a waste of time.

HENRY (voice-over): Republicans admit it is unlikely they'll have the votes to pass the amendment. And Democrats gained an unexpected ally in their fight to stop it. Lynn Cheney who has a lesbian daughter said that her husband had it right during the last presidential campaign when he said the federal government should steer clear of this issue.

LYNN CHENEY, VICE PRESIDENT CHENEY'S WIFE: Well, I thought that the formulation that he used in 2000 was very good. First of all, to be clear that people should be free to enter into the relationships that they choose. And secondly, to recognize what's historically been a situation that when it comes to conferring legal status on relationships, that is a matter left to the states.

HENRY: But the vice president said in January he will support whatever position that President Bush takes and the president has flatly rejected the state's rights arguments.

BUSH: If we are to prevent the meaning of marriage from being changed forever, our nation must enact a constitutional amendment to protect marriage in America.

HENRY: Aides to Senator John Kerry charge that Republicans are just trying to rally their conservative base on the eve of this summer's conventions at the expense of more pressing issues.

MICHAEL MEEHAN, KERRY-EDWARDS SPOKESMAN: They want to have a political divisive wedge issue discussion. They can't pass a budget. They can't give us more money for port security or bioterrorism or rail security.

(END VIDEOTAPE)

NGUYEN: For years, no one could build a road, a mine or log in many of America's national forests. But that may be about to change. The Bush administration now wants to give states more say over whether roads are allowed to be built through remote forest areas. But environmentalists are outraged. They're calling it the biggest timber industry giveaway in history. The president's proposal replaces rules former President Clinton adopted just before leaving office.

However, Mr. Clinton's so-called road less rules are still being challenged in federal court. There are some stories making news across America this Tuesday.

In southern California, a growing wildfires in the Angeles National Forest has forced the evacuation of dozens of homes in nearby areas. The wildfires have burned more than 1,900 acres. Many firefighters are suffering from exhaustion, as temperatures in southern California reached well into the triple digits.

Heavy rains gave way to flooded streets in northeastern Maryland. As many as eight inches fell in some areas. The downpour left about a dozen people homeless, as floodwaters rose as high as five feet in the streets. No injuries were reported.

In California, a former Hooter's restaurant manager may have to spend the next five years in prison after pleading no contest to secretly videotaping women in various states of undress. Juan Martin Aponte is accused of taping job applicants as they changed into the Hooter's uniform. Several of the women filed civil lawsuits against him.

Testimony in the Scott Peterson case centered on evidence taken from his home shortly after his wife's disappearance. Included was a comforter that apparently was stained with blood.

Gloria Gomez of CNN affiliate KOVR has more from Redwood City, California.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I wonder what the visibility underwater is.

GLORIA GOMEZ, KOVR CORRESPONDENT (voice-over): The jury in the Scott Peterson case heard from a witness who described the exhaustive search in the choppy waters of the San Francisco Bay. Divers using high tech sonar equipment collected a lot of underwater debris, none of it connected to the case. Yet when a large piece of sonar equipment was lost and recovered by divers some time later, the defense seized on the opportunity to make a very important point.

CHUCK SMITH, FORMER SAN MATEO COUNTY PROSECUTOR: How did they find the piece of equipment that they had lost, which was smaller than the body of Laci Peterson, how did they find that piece of equipment but not find the body of Laci Peterson if, in fact, the body of Laci Peterson was there?

GOMEZ: Prosecutors contend Scott Peterson dumped his wife's body in the exact spot where he told police he had gone fishing the day Laci was reported missing. The lack of evidence recovered in the Bay turned into a defense plus.

DEAN JOHNSON, LEGAL ANALYST: His point is going to be to the jury look, they didn't find a body because there was no body there.

GOMEZ: Meanwhile, the jury spent close to an hour watching police video of the first Peterson house search. Sergeant Adam McGill testified police were looking for signs of a break-in, but found none. Later, the jury got to see another side to Judge Al Delucchi when he got irritated with prosecutors for withholding more evidence from the defense.

SMITH: The message it sends to the jury is the judge doesn't think the prosecution is doing a good job. I mean that hurts. That hurts a great deal.

(END VIDEOTAPE)

NGUYEN: And that was Gloria Gomez of CNN affiliate KOVR reporting from Redwood City.

A Modesto police crime scene investigator is scheduled to be back on the stand today. He's expected to give jurors more insight into items taken from the Peterson home. And, of course, we'll be following that.

Former Enron CEO Ken Lay says he never expected to be indicted for his company's failure, but says he's confident he'll be cleared of the charges. Lay was indicted last week on 11 counts of fraud.

Lay told CNN's Larry King that he isn't the one truly to blame for the hardships suffered by Enron's stockholders and employees.

(BEGIN VIDEO CLIP FROM CNN'S "LARRY KING LIVE")

KEN LAY, FORMER ENRON CEO: Well, the buck stops here from this standpoint, Larry. And I've said I take responsibility for what happened at Enron, both good and bad. But I cannot take responsible -- responsibly for criminal conduct that I was unaware of.

(END VIDEO CLIP)

NGUYEN: Lay insists that former financial chief, Andrew Fastow, is the only one to blame for Enron's financial collapse. Fastow pleaded guilty in January in exchange for a 10 year prison term.

The Democratic Parties try something new this election year -- the price John Kerry is willing to pay to get his message out to Hispanic voters.

And Cozumel, the Bahamas -- Baghdad? Not your typical summer vacation hot spot. But we'll introduce you to one family who went there and we'll tell you why.

Plus, finding a vaccine to fight the AIDS virus -- is it a long shot or are doctors closer than ever?

We've got the answer, when CNN DAYBREAK continues, right after this break.

(COMMERCIAL BREAK)

NGUYEN: Good morning.

We have your news, money, weather and sports.

The time right now, 5:14 Eastern.

Here's what's all new this morning.

One of the world's top diamond companies, DeBeers, is expected to plead guilty today to a 10-year price fixing charge. The move will allow the South African based company to resume business in the U.S. nearly 60 -- after nearly 60 years. Right now, it sells diamonds through intermediaries.

Actress Isabel Sanford has died in Los Angeles of natural causes. She was known for her role as "Weezie" on both "The Jeffersons" and "All In The Family." Isabel Sanford was 86 years old.

In money, the brokerage firm Morgan Stanley has agreed to pay $54 million to settle a sex discrimination suit. The settlement came just one hour before the trial was scheduled to begin.

In culture, what's old becomes new once again. The "New York Times" will run F. Scott Fitzgerald's "Great Gatsby" in its entirety all next week. During the 19th century, books were often serialized in newspapers. Bet you didn't know that.

Well, in sports, even batting practice pitchers are afraid of Barry Bonds. He was given a playful attent at the intentional -- or at an intentional walk in the All Star Game derby last night. The contest was won by the Baltimore Orioles' shortstop, Miguel Tejada.

And in weather this morning -- Chad, how is it looking?

MYERS: Good morning, Betty.

(WEATHER REPORT)

NGUYEN: The worldwide demand for oil is expected to grow rapidly. Well, that's according to a new report. Let's see if this news is having an effect on overseas financial markets.

And for that, of course, we turn to our Todd Benjamin in London -- good morning, Todd.

TODD BENJAMIN, CNN CORRESPONDENT: Good morning, Betty.

Actually, you know, oil was down slightly in the U.S. yesterday. And that's the reason the Dow was able to turn around. It ended up a quarter of a percent. But the Nasdaq was off a half percent, weighed down by a downgrade by Merrill Lynch on the semiconductor sector. It turned bearish on the sector. It doesn't really see any more up side for the sector. It's worried about the inventory levels.

In terms of the European markets today, you can see the FTSE here in London is struggling, up just slightly. But we're having a better day in Frankfurt for the DAX and the CAC in Paris.

The currency market, if you have family or friends who are traveling, you can see that the dollar is a little weaker against the euro today at 123.76. And the pound is back below 186 -- ouch -- for those traveling in London or in Britain yesterday from the U.S. A very expensive day. But we're back down to 185.82.

Intel is going to be a big focus for the markets after the close today. They'll give their latest earnings report for the quarter.

Here in Europe, we've got Phillips. It did better than expected. Nevertheless, the stock's down by just over a quarter of one percent. Phillips, of course, makes everything from semiconductors to shavers to TVs. And a quarter of their sales actually come from the U.S. And because the euro was stronger against the dollar in the second quarter, some 6 percent stronger, that hurt their bottom line.

Elsewhere, I want to check on semiconductors. They're all trading high, with the exception of Infineon here in Europe today. They were all down yesterday on that downgrade by Merrill Lynch.

And finally, looking at other places in tech, Nokia is down a third of a percent. They report on Thursday.

It's a big earnings week in general, not only here, but in the U.S., as well. Siemens is little changed and Alcatel and S&P, with -- both tortured in the U.S. as well as Edwards -- are in positive territory.

So, the big focus for the market in the U.S. today will be after the close, when Intel reports. And what people are going to be looking at is their outlook for the third quarter. You know, Intel, there's a lot of nervousness about it and some -- several big investment banks have already downgraded the stock. We'll see if we can take it out of filing -- back to you.

NGUYEN: See how Intel does.

All right, thank you, Todd Benjamin.

The candidates are also using ads to reach out to Latino voters.

And our Judy Woodruff takes a look at that.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Su nombre es John Kerry.

WOODRUFF (voice-over): This new ad touts John Kerry as a man of faith, family and honor. It's part of a $1 million multimedia ad buy, targeting Hispanic voters in 10 competitive states.

KERRY: I am committed to celebrating immigration.

WOODRUFF: The Kerry camp is trying to enhance its Latino advantage.

UNIDENTIFIED MALE: We love Kerry! WOODRUFF: A recent Gallup poll shows Senator Kerry 17 points ahead of President Bush among registered Hispanic voters in a three- way contest, including Ralph Nader. A sizable lead, but its 10 points less than Al Gore's Latino vote in the 2000 election.

Bush's 35 percent then was considered an impressive performance for a Republican. And he appears to be holding on to that support. Still, more than half of Hispanic voters disapprove of the way the president is handling his job, a less upbeat rating than Bush gets from whites, but not as negative as the marks he gets from African- Americans.

BUSH: We share the same goal. We will keep working to make this nation a welcoming place for Hispanic people.

WOODRUFF: The Hispanic voters who stand to influence the race the most are those in battleground states, such as Florida. Bush narrowly won Florida in 2000 with the help of conservative Cuban voters. Some analysts believe the political dynamic may be shifting in Florida as other groups of Hispanics flood into the state, including Puerto Ricans, who tend to lean Democratic.

TOM FIEDLER, "MIAMI HERALD": There are obviously some demographic shifts that are going on that the parties are attempting to take advantage of. I think a big one that the Democrats would hope will work in their favor is the continued growth of Hispanic voters around the Orlando area, central Florida.

WOODRUFF: The Bush camp also is eager for a repeat win in Arizona, another state with a growing Latino population. The most recent Arizona poll shows Bush's lead over Kerry has narrowed to three points. Our Bob Novak reports Arizona Senator John McCain has told colleagues he's worried about Bush's prospects in his home state.

(END VIDEOTAPE)

NGUYEN: The nation's only Latino governor, Bill Richardson of New Mexico, will be a guest in the 8:00 a.m. hour of CNN's "AMERICAN MORNING." He'll tell you what to expect at the Democratic National Convention news conference. That's set to take place this morning.

This is DAYBREAK for Tuesday morning.

We're back in just a moment.

(COMMERCIAL BREAK)

NGUYEN: Well, most of you probably wouldn't consider Baghdad much of a vacation spot right now. But that's not how a North Carolina family sees it. They packed their bags and came back with plenty to talk about.

Katina Rankin from Raleigh-Durham affiliate WTVD has more.

(BEGIN VIDEOTAPE)

AHMAD ALSAMARRAEE: What did you do this summer?

UNIDENTIFIED CHILD: Went to Iraq.

KATINA RANKIN, WTVD CORRESPONDENT: That's exactly what this Knightdale man, Ahmad Alsamarraee and his entire family did for their summer vacation. They went to Baghdad.

ALSAMARRAEE: Well, when we first pulled in, the first thing we saw was a car bombing. So it was like OK, not a surprise. We've heard a lot about that stuff.

RANKIN: Ahmad lived in Baghdad for 19 years. He thought it would be a great idea for his children to see his family in that country and see history in the making.

For his wife Susan, she wanted to see our troops.

SUSAN ALSAMARRAEE: I tried to speak with as many as I could. They were very important to me when we went over there. I'd like to know their background and who they leave behind, because they're doing such a great thing for our country and for Iraq.

RANKIN: For their children, they remembered the sound of bombs going off. But they do have other memories of the war torn country.

RAMZIA ALSAMARRAEE: I'd like sleeping during the day. What I wouldn't like is the bathrooms.

UNIDENTIFIED CHILD: Everybody there has chickens in the backyard that you can like chase around and stuff.

UNIDENTIFIED CHILD: Very hot. Just hot and that's it. It wasn't really humid.

(END VIDEOTAPE)

NGUYEN: And that was Katina Rankin of our Raleigh-Durham affiliate WTVD.

Here's what's all new in the next half hour.

A scathing summary or just a pointless paper push? The prime minister gets a glimpse of a U.K. report on WMDs. Did Blair mislead Britain?

Also, e-mail -- love it or hate it, any way you see it, it's pretty much a way of life for most of us. Our Bruce Burkhardt has a unique take on advances in e-mail just ahead.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: ... looking at their chest.

(END VIDEO CLIP) NGUYEN: What in the world? Television T-shirts? We'll explain, a little later on DAYBREAK.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Where's the on and off switch?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired July 13, 2004 - 05:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: New this morning, clashes in Iraq, including an attack on a U.S. military convoy.
It's Tuesday, July 13, and this is DAYBREAK.

Well, good morning.

From the CNN Global Headquarters in Atlanta, I'm Betty Nguyen in for Carol Costello.

Now in the news, Manila says it will withdraw its troops from Iraq. In return, abductors of a Filipino truck driver say they will release him today. The kidnappers had threatened to behead the hostage if the troops were not withdrawn by July 20.

We'll get a live report out of Manila in just two minutes.

In other news, Britain's Lord Butler delivers a report on Iraq today to Prime Minister Tony Blair. The report on the prewar intelligence used to justify the war is expected to criticize both the prime minister and British intelligence officials. It'll be made public tomorrow.

In the U.S. Senate, debate on banning same-sex marriages resumes in just a few hours. A backer of the proposed constitutional amendment says his side is still well short of the votes needed for approval.

In five hours, a group of senators opens a hearing on the abuse of steroids by athletes. A college football player from a Division One school is expected to testify. He'll wear a hood to disguise his identity.

And this morning it's still very early, but Chad is up and raring to go, as he has the weather forecast -- good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Betty.

(WEATHER REPORT)

NGUYEN: Well, kidnappers in Iraq are promising to release their Philippine hostage today. In exchange, it appears the Philippine government is agreeing to give in to the kidnappers' demands.

Our Maria Ressa joins us now by phone from Manila with the latest -- good morning, Maria.

MARIA RESSA, CNN CORRESPONDENT: Good morning, Betty.

In the very early morning hours Tuesday on Al Jazeera television, the kidnappers of 46-year-old Angelo de la Cruz said he had been moved to the place where he would be executed. Shortly after, a Philippine official involved in the negotiations appeared on Al Jazeera again with a statement, saying the Philippines would withdraw troops "as soon as possible." That statement has caused this confusion. Will the Philippines give in to terrorist demands to pull out by July 20 or will they pull out as planned, a month later?

As Manila woke up, we were told the crisis committee was meeting. No statements for several hours. What we know for sure is that the Philippine government is aware of the developments. Officials have been asked not to comment on this issue. The presidential spokesman saying, "This is a difficult and crucial part of the negotiations for the life of Angelo de la Cruz."

All official statements will come from the secretary of foreign affairs. And just a short while ago, she gave a very short statement. She said: "When Deputy Foreign Minister Rafael Seguis spoke this morning with Al Jazeera, he spoke with foreknowledge and the full authority of the Philippine g."

Back to you -- Betty.

NGUYEN: So despite this confusion, the hostage is supposedly going to be released today.

Any indication as to where or when?

RESSA: At this point, all of that is unclear. And the Philippine government and the negotiators are not releasing any further information. All they say is that they're in a very delicate and critical part of the negotiations but that they still remain hopeful of his -- for his release.

NGUYEN: All right, Maria Ressa.

Thank you for that report out of Manila.

Back in Iraq, there was another attack, on U.S. troops this time. Insurgents targeted an American convoy in Baghdad. One American soldier was injured in that attack. It happened just a short time ago and these pictures are just in to CNN from that scene.

To keep up with you -- or for you to keep up on Iraq and all the developments there, you can just log onto the computer. For more on these latest attacks and the Philippine troop situation, just go to cnn.com.

Well, a vote is expected in the Senate later this week on a constitutional amendment to ban same-sex marriage. Supporters may not have enough votes to pass the controversial measure.

But, as CNN congressional CNN's Ed Henry reports, the timing of the vote may be a bigger issue than the amendment itself.

(BEGIN VIDEOTAPE)

SEN. NICK SANTORUM (R), PENNSYLVANIA: I can't think of anything more important than the basic social building block of our country. That's what marriage is. That's what the family is. And it is in jeopardy. It is in serious, real jeopardy as a result of what the courts are doing.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I celebrate marriage. I understand the difficulties in working to keep it together but I really believe that this is a waste of time.

HENRY (voice-over): Republicans admit it is unlikely they'll have the votes to pass the amendment. And Democrats gained an unexpected ally in their fight to stop it. Lynn Cheney who has a lesbian daughter said that her husband had it right during the last presidential campaign when he said the federal government should steer clear of this issue.

LYNN CHENEY, VICE PRESIDENT CHENEY'S WIFE: Well, I thought that the formulation that he used in 2000 was very good. First of all, to be clear that people should be free to enter into the relationships that they choose. And secondly, to recognize what's historically been a situation that when it comes to conferring legal status on relationships, that is a matter left to the states.

HENRY: But the vice president said in January he will support whatever position that President Bush takes and the president has flatly rejected the state's rights arguments.

BUSH: If we are to prevent the meaning of marriage from being changed forever, our nation must enact a constitutional amendment to protect marriage in America.

HENRY: Aides to Senator John Kerry charge that Republicans are just trying to rally their conservative base on the eve of this summer's conventions at the expense of more pressing issues.

MICHAEL MEEHAN, KERRY-EDWARDS SPOKESMAN: They want to have a political divisive wedge issue discussion. They can't pass a budget. They can't give us more money for port security or bioterrorism or rail security.

(END VIDEOTAPE)

NGUYEN: For years, no one could build a road, a mine or log in many of America's national forests. But that may be about to change. The Bush administration now wants to give states more say over whether roads are allowed to be built through remote forest areas. But environmentalists are outraged. They're calling it the biggest timber industry giveaway in history. The president's proposal replaces rules former President Clinton adopted just before leaving office.

However, Mr. Clinton's so-called road less rules are still being challenged in federal court. There are some stories making news across America this Tuesday.

In southern California, a growing wildfires in the Angeles National Forest has forced the evacuation of dozens of homes in nearby areas. The wildfires have burned more than 1,900 acres. Many firefighters are suffering from exhaustion, as temperatures in southern California reached well into the triple digits.

Heavy rains gave way to flooded streets in northeastern Maryland. As many as eight inches fell in some areas. The downpour left about a dozen people homeless, as floodwaters rose as high as five feet in the streets. No injuries were reported.

In California, a former Hooter's restaurant manager may have to spend the next five years in prison after pleading no contest to secretly videotaping women in various states of undress. Juan Martin Aponte is accused of taping job applicants as they changed into the Hooter's uniform. Several of the women filed civil lawsuits against him.

Testimony in the Scott Peterson case centered on evidence taken from his home shortly after his wife's disappearance. Included was a comforter that apparently was stained with blood.

Gloria Gomez of CNN affiliate KOVR has more from Redwood City, California.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I wonder what the visibility underwater is.

GLORIA GOMEZ, KOVR CORRESPONDENT (voice-over): The jury in the Scott Peterson case heard from a witness who described the exhaustive search in the choppy waters of the San Francisco Bay. Divers using high tech sonar equipment collected a lot of underwater debris, none of it connected to the case. Yet when a large piece of sonar equipment was lost and recovered by divers some time later, the defense seized on the opportunity to make a very important point.

CHUCK SMITH, FORMER SAN MATEO COUNTY PROSECUTOR: How did they find the piece of equipment that they had lost, which was smaller than the body of Laci Peterson, how did they find that piece of equipment but not find the body of Laci Peterson if, in fact, the body of Laci Peterson was there?

GOMEZ: Prosecutors contend Scott Peterson dumped his wife's body in the exact spot where he told police he had gone fishing the day Laci was reported missing. The lack of evidence recovered in the Bay turned into a defense plus.

DEAN JOHNSON, LEGAL ANALYST: His point is going to be to the jury look, they didn't find a body because there was no body there.

GOMEZ: Meanwhile, the jury spent close to an hour watching police video of the first Peterson house search. Sergeant Adam McGill testified police were looking for signs of a break-in, but found none. Later, the jury got to see another side to Judge Al Delucchi when he got irritated with prosecutors for withholding more evidence from the defense.

SMITH: The message it sends to the jury is the judge doesn't think the prosecution is doing a good job. I mean that hurts. That hurts a great deal.

(END VIDEOTAPE)

NGUYEN: And that was Gloria Gomez of CNN affiliate KOVR reporting from Redwood City.

A Modesto police crime scene investigator is scheduled to be back on the stand today. He's expected to give jurors more insight into items taken from the Peterson home. And, of course, we'll be following that.

Former Enron CEO Ken Lay says he never expected to be indicted for his company's failure, but says he's confident he'll be cleared of the charges. Lay was indicted last week on 11 counts of fraud.

Lay told CNN's Larry King that he isn't the one truly to blame for the hardships suffered by Enron's stockholders and employees.

(BEGIN VIDEO CLIP FROM CNN'S "LARRY KING LIVE")

KEN LAY, FORMER ENRON CEO: Well, the buck stops here from this standpoint, Larry. And I've said I take responsibility for what happened at Enron, both good and bad. But I cannot take responsible -- responsibly for criminal conduct that I was unaware of.

(END VIDEO CLIP)

NGUYEN: Lay insists that former financial chief, Andrew Fastow, is the only one to blame for Enron's financial collapse. Fastow pleaded guilty in January in exchange for a 10 year prison term.

The Democratic Parties try something new this election year -- the price John Kerry is willing to pay to get his message out to Hispanic voters.

And Cozumel, the Bahamas -- Baghdad? Not your typical summer vacation hot spot. But we'll introduce you to one family who went there and we'll tell you why.

Plus, finding a vaccine to fight the AIDS virus -- is it a long shot or are doctors closer than ever?

We've got the answer, when CNN DAYBREAK continues, right after this break.

(COMMERCIAL BREAK)

NGUYEN: Good morning.

We have your news, money, weather and sports.

The time right now, 5:14 Eastern.

Here's what's all new this morning.

One of the world's top diamond companies, DeBeers, is expected to plead guilty today to a 10-year price fixing charge. The move will allow the South African based company to resume business in the U.S. nearly 60 -- after nearly 60 years. Right now, it sells diamonds through intermediaries.

Actress Isabel Sanford has died in Los Angeles of natural causes. She was known for her role as "Weezie" on both "The Jeffersons" and "All In The Family." Isabel Sanford was 86 years old.

In money, the brokerage firm Morgan Stanley has agreed to pay $54 million to settle a sex discrimination suit. The settlement came just one hour before the trial was scheduled to begin.

In culture, what's old becomes new once again. The "New York Times" will run F. Scott Fitzgerald's "Great Gatsby" in its entirety all next week. During the 19th century, books were often serialized in newspapers. Bet you didn't know that.

Well, in sports, even batting practice pitchers are afraid of Barry Bonds. He was given a playful attent at the intentional -- or at an intentional walk in the All Star Game derby last night. The contest was won by the Baltimore Orioles' shortstop, Miguel Tejada.

And in weather this morning -- Chad, how is it looking?

MYERS: Good morning, Betty.

(WEATHER REPORT)

NGUYEN: The worldwide demand for oil is expected to grow rapidly. Well, that's according to a new report. Let's see if this news is having an effect on overseas financial markets.

And for that, of course, we turn to our Todd Benjamin in London -- good morning, Todd.

TODD BENJAMIN, CNN CORRESPONDENT: Good morning, Betty.

Actually, you know, oil was down slightly in the U.S. yesterday. And that's the reason the Dow was able to turn around. It ended up a quarter of a percent. But the Nasdaq was off a half percent, weighed down by a downgrade by Merrill Lynch on the semiconductor sector. It turned bearish on the sector. It doesn't really see any more up side for the sector. It's worried about the inventory levels.

In terms of the European markets today, you can see the FTSE here in London is struggling, up just slightly. But we're having a better day in Frankfurt for the DAX and the CAC in Paris.

The currency market, if you have family or friends who are traveling, you can see that the dollar is a little weaker against the euro today at 123.76. And the pound is back below 186 -- ouch -- for those traveling in London or in Britain yesterday from the U.S. A very expensive day. But we're back down to 185.82.

Intel is going to be a big focus for the markets after the close today. They'll give their latest earnings report for the quarter.

Here in Europe, we've got Phillips. It did better than expected. Nevertheless, the stock's down by just over a quarter of one percent. Phillips, of course, makes everything from semiconductors to shavers to TVs. And a quarter of their sales actually come from the U.S. And because the euro was stronger against the dollar in the second quarter, some 6 percent stronger, that hurt their bottom line.

Elsewhere, I want to check on semiconductors. They're all trading high, with the exception of Infineon here in Europe today. They were all down yesterday on that downgrade by Merrill Lynch.

And finally, looking at other places in tech, Nokia is down a third of a percent. They report on Thursday.

It's a big earnings week in general, not only here, but in the U.S., as well. Siemens is little changed and Alcatel and S&P, with -- both tortured in the U.S. as well as Edwards -- are in positive territory.

So, the big focus for the market in the U.S. today will be after the close, when Intel reports. And what people are going to be looking at is their outlook for the third quarter. You know, Intel, there's a lot of nervousness about it and some -- several big investment banks have already downgraded the stock. We'll see if we can take it out of filing -- back to you.

NGUYEN: See how Intel does.

All right, thank you, Todd Benjamin.

The candidates are also using ads to reach out to Latino voters.

And our Judy Woodruff takes a look at that.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Su nombre es John Kerry.

WOODRUFF (voice-over): This new ad touts John Kerry as a man of faith, family and honor. It's part of a $1 million multimedia ad buy, targeting Hispanic voters in 10 competitive states.

KERRY: I am committed to celebrating immigration.

WOODRUFF: The Kerry camp is trying to enhance its Latino advantage.

UNIDENTIFIED MALE: We love Kerry! WOODRUFF: A recent Gallup poll shows Senator Kerry 17 points ahead of President Bush among registered Hispanic voters in a three- way contest, including Ralph Nader. A sizable lead, but its 10 points less than Al Gore's Latino vote in the 2000 election.

Bush's 35 percent then was considered an impressive performance for a Republican. And he appears to be holding on to that support. Still, more than half of Hispanic voters disapprove of the way the president is handling his job, a less upbeat rating than Bush gets from whites, but not as negative as the marks he gets from African- Americans.

BUSH: We share the same goal. We will keep working to make this nation a welcoming place for Hispanic people.

WOODRUFF: The Hispanic voters who stand to influence the race the most are those in battleground states, such as Florida. Bush narrowly won Florida in 2000 with the help of conservative Cuban voters. Some analysts believe the political dynamic may be shifting in Florida as other groups of Hispanics flood into the state, including Puerto Ricans, who tend to lean Democratic.

TOM FIEDLER, "MIAMI HERALD": There are obviously some demographic shifts that are going on that the parties are attempting to take advantage of. I think a big one that the Democrats would hope will work in their favor is the continued growth of Hispanic voters around the Orlando area, central Florida.

WOODRUFF: The Bush camp also is eager for a repeat win in Arizona, another state with a growing Latino population. The most recent Arizona poll shows Bush's lead over Kerry has narrowed to three points. Our Bob Novak reports Arizona Senator John McCain has told colleagues he's worried about Bush's prospects in his home state.

(END VIDEOTAPE)

NGUYEN: The nation's only Latino governor, Bill Richardson of New Mexico, will be a guest in the 8:00 a.m. hour of CNN's "AMERICAN MORNING." He'll tell you what to expect at the Democratic National Convention news conference. That's set to take place this morning.

This is DAYBREAK for Tuesday morning.

We're back in just a moment.

(COMMERCIAL BREAK)

NGUYEN: Well, most of you probably wouldn't consider Baghdad much of a vacation spot right now. But that's not how a North Carolina family sees it. They packed their bags and came back with plenty to talk about.

Katina Rankin from Raleigh-Durham affiliate WTVD has more.

(BEGIN VIDEOTAPE)

AHMAD ALSAMARRAEE: What did you do this summer?

UNIDENTIFIED CHILD: Went to Iraq.

KATINA RANKIN, WTVD CORRESPONDENT: That's exactly what this Knightdale man, Ahmad Alsamarraee and his entire family did for their summer vacation. They went to Baghdad.

ALSAMARRAEE: Well, when we first pulled in, the first thing we saw was a car bombing. So it was like OK, not a surprise. We've heard a lot about that stuff.

RANKIN: Ahmad lived in Baghdad for 19 years. He thought it would be a great idea for his children to see his family in that country and see history in the making.

For his wife Susan, she wanted to see our troops.

SUSAN ALSAMARRAEE: I tried to speak with as many as I could. They were very important to me when we went over there. I'd like to know their background and who they leave behind, because they're doing such a great thing for our country and for Iraq.

RANKIN: For their children, they remembered the sound of bombs going off. But they do have other memories of the war torn country.

RAMZIA ALSAMARRAEE: I'd like sleeping during the day. What I wouldn't like is the bathrooms.

UNIDENTIFIED CHILD: Everybody there has chickens in the backyard that you can like chase around and stuff.

UNIDENTIFIED CHILD: Very hot. Just hot and that's it. It wasn't really humid.

(END VIDEOTAPE)

NGUYEN: And that was Katina Rankin of our Raleigh-Durham affiliate WTVD.

Here's what's all new in the next half hour.

A scathing summary or just a pointless paper push? The prime minister gets a glimpse of a U.K. report on WMDs. Did Blair mislead Britain?

Also, e-mail -- love it or hate it, any way you see it, it's pretty much a way of life for most of us. Our Bruce Burkhardt has a unique take on advances in e-mail just ahead.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: ... looking at their chest.

(END VIDEO CLIP) NGUYEN: What in the world? Television T-shirts? We'll explain, a little later on DAYBREAK.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Where's the on and off switch?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com