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CNN Live At Daybreak

United They Stand; Conventional Wisdom; No Regrets; New Terror Tactic; Missing Woman Search; International Market Update; Party People

Aired July 27, 2004 - 05:30   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.


CAROL COSTELLO, CNN ANCHOR: All right, thank you, Rob.
It is day two of the Democratic National Convention in Boston. Tonight the focus will be on John Kerry's personal achievements and life. At the wrap up of day one, former President Clinton had the crowd standing nine times during his speech, and there were other highlights as well.

CNN's Kareen Wynter joins us now live from Boston with more.

Good morning.

KAREEN WYNTER, CNN CORRESPONDENT: Good morning, Carol.

And what a night it was as Democrats united, calling for new leadership as they energized a crowd here at the Fleet Center.

(BEGIN VIDEOTAPE)

WYNTER (voice-over): The first night of the Democratic National Convention brought out an impressive lineup of former political primetime players. Former Vice President Al Gore kicked off the evening.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: I firmly believe America needs new leadership that will make us stronger at home and respected in the world. And we're here this week to present to the nation the man who should be and will be our new president, John Kerry.

WYNTER: Gore criticized President Bush's handling of the economy, budget deficits, the war in Iraq and terrorism, as did former President Jimmy Carter, who pointed out the high stakes in the November election.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: In just 34 months, we have watched with deep concern as all of this good will has been squandered by virtually unbroken series of mistakes and miscalculations.

WYNTER: The night's featured speaker, another former president, Bill Clinton, introduced by wife Hillary, appealed to the party faithful to help lead Kerry to the White House. Mr. Clinton was critical of the current administration's handling of taxes, health care and education. BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: They believe the role of government is to concentrate wealth and power in the hands of those who embrace their economic, political and social views.

(END VIDEOTAPE)

WYNTER: Senator Kerry continues on the campaign trail today in Norfolk, Virginia, Carol. He heads next to Philadelphia.

COSTELLO: Kareen Wynter, live from Boston this morning, thank you.

He's read it through 30 times and still has a day and a half to keep on practicing. Aides say John Edwards knew what he wanted to put in his acceptance speech for vice president almost from the day he was named as John Kerry's running mate.

CNN's Elaine Quijano takes a look at how Edwards is getting ready for the convention.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): Instead of making one last campaign stop in his home state of North Carolina before heading to Boston, Senator John Edwards spent the afternoon at his house in Raleigh, reading over his convention speech.

The senator has a minor cold, and the campaign says he canceled to rest his voice, which sounded strained and raspy during an appearance Monday morning. But aides say he is ready to deliver his speech.

A senior campaign official says Edwards knew what he wanted to say from almost the moment John Kerry chose him as his running mate. Edwards will mention Iraq and will bring back a theme from the primaries, the concept of two Americas. Absent, aides say, the harsh tone that vice presidential candidates have sometimes been known to take. Edwards plans a positive message.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: We're going to reject this tired, old, hateful, negative politics of the past.

QUIJANO: Edwards has three goals for the speech, to introduce John Kerry to the American people, to introduce himself and to explain where the two men would take the country.

(END VIDEOTAPE)

COSTELLO: That was CNN's Elaine Quijano reporting.

John Kerry's blunt talking wife, Teresa, will speak at the Democratic Convention tonight. She is expected to focus on issues like health care and economic security. But she's gotten perhaps a lot of unwanted attention for a testy exchange where she told a newspaperman to shove it.

Heinz Kerry talked about that in an interview with CNN's Bill Hemmer.

(BEGIN VIDEOTAPE)

BILL HEMMER, CNN ANCHOR: Take me back to Sunday night, do you regret telling that reporter to shove it?

TERESA HEINZ KERRY, JOHN KERRY'S WIFE: No. No. I respect reporters and I respect anyone who does their job well. I don't, like anybody else, want to be trapped or be misrepresented intentionally by someone. That's what happened, and I defended myself.

HEMMER: The quote I have is that you said un-American traits.

HEINZ KERRY: No, un-Pennsylvanian.

HEMMER: OK, back up a little bit then. We need to turn back some of the creeping un-Pennsylvanian...

HEINZ KERRY: Traits.

HEMMER: ... and sometimes un-American traits that are creeping in to some of our politics.

HEINZ KERRY: Correct, and that's...

HEMMER: That the way you remember it?

HEINZ KERRY: ... absolutely correct. I would say that again.

HEMMER: And what did the reporter say to you then?

HEINZ KERRY: Un-American activities, which has a very different connotation. It's a political connotation of McCarthy implications, which I would not use unless it was very specific. And I would use it if it was correct, but that's not what I was talking about.

(END VIDEOTAPE)

COSTELLO: You can hear Mrs. Kerry's whole interview in a couple of hours on "AMERICAN MORNING." That begins at 7:00 Eastern. Actually, that would be an hour and a half.

Another of tonight's convention speakers will be Ron Reagan. The son of the late president will put the spotlight on stem cell research. He'll defend the controversial study, which offers medical hope for victims of Alzheimer's disease and other illnesses. President Bush opposes stem cell research because the cells are harvested from fertilized human eggs.

Also in tonight's convention lineup, Howard Dean. The former Vermont governor and ex-presidential candidate is one of the Bush administration's fiercest critics. He says he's not been asked to soften his rhetoric for the address, but he says the party is committed to projecting a positive vision during the convention.

You can watch the big speeches and major moments of the Democratic National Convention right here on CNN live primetime tonight. Ten Eastern our Wolf Blitzer will host the "AMERICA VOTES 2004 SPECIAL." Aaron Brown picks up our coverage at 11:00 Eastern with a "SPECIAL CONVENTION EDITION OF NEWSNIGHT." And at midnight, CNN's Larry King will be live from the Fleet Center in Boston.

The preferred method of terror in Iraq now appears to be kidnapping.

Matthew Chance looks at this disturbing trend.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is the nightmare of every foreigner working in Iraq. Truck drivers, security guards, even a diplomat have been taken hostage; but everyone, include the coalition, the reconstruction effort, or the new Iraqi government, seems a target.

SABBAH KADUM, INTERIOR MINISTRY: Really their intention of the terrorists is to destroy this government. The very fact that has been recognized by a number of countries in the world makes these groups more desperate because now what are they? Do they really have a political program? And if they do, why don't they unmask their faces and show us this program?

CHANCE: But the holding of hostages under the threat of execution is proving an emotionally charged change of tactics, pressuring companies, even countries, to leave Iraq in its chaos.

The biggest success of the hostage takes is the early withdrawal of Philippine forces from Iraq, after one of their nationals, a truck driver, was threatened with execution.

The kidnapping is more than just a problem for foreigners. These Iraqi women are mourning the death of Ahmed Abdullah, a Baghdad goldsmith, kidnapped and killed last week. The scrap of card is a ransom demand for $50,000. It was never paid.

Across Iraq, ordinary families, perceived to have money, live in fear of abductions.

Iraqi officials believe organized criminals, motivated by cash, are involved in the taking of foreign hostages as well.

KADUM: It's the same operation where perhaps they can sell this at a higher price, these organized crime for at a higher price for some of these terrorism groups that are well financed. Whether the groups that originated from Afghanistan or the groups that used to support previous regimes who are also well funded.

CHANCE (on camera): So you believe it may be criminal gangs taking the hostages...

KADUM: Yes.

CHANCE: ... and then selling them up the chain?

KADUM: I think there is evidence of that.

CHANCE (voice-over): The chain reaction raising the stakes for many living and working here.

(END VIDEOTAPE)

CHANCE: Now negotiations to secure the release of these hostages are often secretive, often highly dangerous, as well, but there have been some results. Only yesterday, a senior Egyptian diplomat, Momdoh Kotb, the third highest-ranking diplomat here in Baghdad, who had been held captive by militants since Friday, was set free.

Now the actual details of what it was that took the Egyptian government to get that release have remained under tight wraps. The Egyptian government says that it didn't pay any kind of ransom. But sources tell CNN, sources here in Baghdad, that large amounts of cash did actually change hands paid by the Egyptian government. That's something many countries involved in Iraq will feel is counterproductive and may actually encourage more kidnappings in the future.

COSTELLO: I believe a lot of people might say that, Matthew. So how does this work? Who do they negotiate with, do we know?

CHANCE: It's extremely complex. It involves the whole network of intermediaries, including diplomats, including local figures on the ground. Even Muslim clerics are involved in their role as community leaders to try and get to the hostage takers and either to convince them to give these hostages up or to pass on what kind of deal to broker. To act as go-betweens in any kind of deals that are actually brokered either between countries, as we have seen over the past few days with Egypt, or between the hostage takers and the companies who employ these individuals. At the moment, there are 7 -- sorry, there are 11 truck drivers still in custody across Iraq and their companies are engaged in intensive negotiations to try and get them out, too.

COSTELLO: Matthew Chance, live for us this morning, thank you.

And you can always keep up with what's happening in Iraq by heading to our Web site. We have got the latest developments, along with a special report, "The Struggle for Iraq." It's all at CNN.com.

Here are some stories making news "Across America" this Tuesday.

There will be pretrial hearings today in the Michael Jackson case. The judge will hear arguments on media requests for grand jury transcripts, as well as a defense motion to dismiss the indictment. The hearings could last for several days. Jackson's child molestation trial is set to begin September 13. What the defense is asking for another four months to prepare their case.

In California, a Santa Clara judge is sentenced to 90 days in jail at his punishment -- as his punishment in a ticket-fixing scandal. William Danser will be allowed to serve his sentence under house arrest because of failing health. Danser and a Santa Clara police detective were both found guilty of fixing more than 30 traffic tickets for local celebrities and sports figures. The detective also worked for the San Jose Sharks hockey team.

In Massachusetts, Daniel Holland surrendered his parental rights from a jail cell. Holland is serving a life sentence for killing his wife and allowing his then 8-year-old son Patrick to find the body. Patrick is 14 now and he went to court and has now won the unprecedented right to divorce his father.

A busy night for Salt Lake City police in the ongoing search for a missing pregnant woman. Police used cadaver dogs to search an area landfill. It is the second time police have used the dogs to comb through the trash heap. Lori Hacking was last seen eight days ago at an area park.

We get more now from Sue Thompson of CNN affiliate KSTU in Salt Lake City.

(BEGIN VIDEOTAPE)

SUE THOMPSON, KSTU-TV REPORTER (voice-over): Mark and Lori Hacking's family have stepped back from cameras and away from questions. They now have their own spokesperson, as the investigation into Lori's disappearance zeroes in on Lori's husband even more.

While Mark Hacking remains hospitalized, he has retained Defense Attorney Gil Athay. Athay tells Fox 13, "I have been involved since Thursday evening and have met several times with Mark." Athay is no stranger to tough high-profile cases. Six years ago, Athay defended Ferosa Bluff and Andrew Fedorowicz. The two were convicted of murdering Bluff's 3-year-old daughter. Athay also defended Dale Selby in Ogden's hi-fi murders. Selby killed three people by making them drink drain cleaner.

UNIDENTIFIED FEMALE: Keep track of where you have been, and then come back and tell us so we can send other people out to finish.

THOMPSON: Meantime, searchers went out to again look for Lori. Samarria Burton (ph) has been here since day one. She says she'll stay to help until told otherwise.

UNIDENTIFIED FEMALE: Anyone who wants to come out, we invite them, because that would be helpful, you know, very helpful. And it gives the family hope. And you know, and just kind of keeps the wheel moving, you know, just in the hopes that something will be found and you know something can be resolved.

(END VIDEOTAPE)

COSTELLO: That was Sue Thompson of CNN affiliate KSTU in Salt Lake City.

"The Salt Lake City Tribune," by the way, reports that just three days before her disappearance, Lori Hocking may have found out that her husband was lying about being accepted to medical school. The paper quotes coworker Darren Openshaw (ph) who overhead a phone conversation believed to be with the University of North Carolina.

In the next hour of DAYBREAK, terror preps in the U.K. The step Britain is taking to get its citizens ready for any terrorist attack.

This is DAYBREAK for Tuesday, July 27.

(COMMERCIAL BREAK)

COSTELLO: Your news, money, weather and sports. It is 5:45 Eastern. Here is what's all new this morning.

Power couple Bill and Hillary Clinton fired up the crowd on day one of the Democratic National Convention. Tonight's lineup includes Teresa Heinz Kerry, Teresa Heinz Kerry, Howard Dean and Ron Reagan.

Federal prosecutors are trying to keep Zacarias Moussaui's mental health experts away from him. He's the only U.S. defendant charged with 9/11 crimes. Prosecutors say testing now would make it hard for government experts to evaluate Moussaui's mental health later if there is a death penalty phase in his trial.

In money news, a new feature for your cell phone, Apple Computer and Motorola have signed a deal to put Apple's iTunes music service on cell phones. The deal will make it possible for you to transfer songs from your computer to your Motorola mobile handset.

In culture, teen star Mary-Kate Olsen has been discharged from a treatment facility after six weeks. She was getting help for an eating disorder.

In sports, Minnesota beat Chicago last night. The Twins are now a game and a half ahead of the second place White Sox in the AL Central -- Rob.

ROB MARCIANO, CNN METEOROLOGIST: Carol, a little baseball weather for you across the central part of the U.S.

(WEATHER REPORT)

MARCIANO: See you in about 10 minutes -- Carol.

COSTELLO: We'll be here. Thank you, Rob.

Those are the latest headlines for you.

Time now to check the overseas markets to see what Wall Street investors may be watching.

For that we turn to Todd Benjamin. He's checking the numbers for us in London.

Good morning.

TODD BENJAMIN, CNN CORRESPONDENT: Good morning, Carol.

As you are well aware, the markets really have been struggling among a host of worries, including high oil prices, terrorism, the possibility of slowing economies, slower earnings growth. And finally, though, today, the European markets are up after they eked into negative territory yesterday in terms of the broader market.

Here are where the numbers are at this hour. The FTSE is up here in London just a quarter of 1 percent, but the DAX is up three- quarters of 1 percent in Frankfurt. We had better-than-expected business confidence numbers out of Germany. So that's a real plus there. And the CAC in Paris is up a half percent.

On the confidence note, we're going to get consumer confidence out of the U.S. today, and that will be a key number for the markets, because the consumer, of course, is two-thirds of the economy in terms of spending. And there have been worries about the consumer because of higher gasoline prices and worries about employment.

In terms of what the futures market is pointing to right now, it's pointing to a slightly higher open. And in terms of what the market will be focusing on, not only consumer confidence, but of course we'll continue this slew of earnings for the second quarter. And we'll see if companies are upbeat about guidance going forward.

Carol, have a great morning. Back to you.

COSTELLO: You too. Thank you, Todd.

In this election year, there are still thousands of eligible voters who just don't seem to care about going to the polls. In the next hour of DAYBREAK, a look at voter apathy, and we'll talk with one man determined to change that.

And next, if you have high blood pressure, we'll tell you about the one drink that may help bring it down.

Stay with us. This is DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: "Health Headlines" for you this morning.

Researchers say there may be a link between a sleep disorder and death from stroke. People who suffer from sleep apnea stop breathing for 10 seconds or more while sleeping. New research indicates the disorder may be a new risk factor for stroke deaths.

New genetic research finds that women and men may be seeing things very differently color wise. DNA analysis shows the gene that allows people to see the color red has multiple variations. And the study's coauthor says women's color perception may be more enhanced than men's. But we always knew that, didn't we?

And have a cup of tea, it may help keep your blood pressure down. Researchers in Taiwan found that those who drank Green and Ulong tea were less likely to develop high blood pressure.

For more on this or any other health story, head to our Web site. The address, CNN.com/health.

The Dems get down to the business of red, white and blue in Boston. We'll take you there live at the top of the hour.

For now, we leave you with a taste of politics from the Fleet Center.

(BEGIN VIDEOTAPE)

TERRY MCAULIFFE, DNC CHAIRMAN: The 44th quadrennial National Convention of the Democratic Party will now come to order.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: My friends, fellow Democrats, fellow Americans, I'm going to be candid with you. I had hoped to be back here this week under different circumstances, running for re-election.

(APPLAUSE)

But you know the old saying: You win some, you lose some. And then there's that little-known third category.

(LAUGHTER)

In our Democracy, every vote has power. And never forget that power is yours. Don't let anyone take it away or talk you into throwing it away.

And let's make sure that this time every vote is counted.

(APPLAUSE)

JIMMY CARTER, FMR. PRESIDENT OF THE UNITED STATES: After 9/11, America stood proud -- wounded, but determined and united. A cowardly attack on innocent civilians brought us an unprecedented level of cooperation and understanding around the world. But in just 34 months, we have watched with deep concern as all this good will has been squandered by a virtually unbroken series of mistakes and miscalculations.

(APPLAUSE)

UNIDENTIFIED FEMALE: The trends of who we were on 9/11 should stay with us, a light in the darkness to show us the way.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: If we just have the courage to act on our conviction, we will, by an overwhelming majority, send John Kerry and John Edwards to do their duty for us in the White House starting next year.

B. CLINTON: After three conventions as a candidate or a president, tonight I come to you as a citizen, returning to the role that I have played for most of my life, as a foot soldier in our fight for the future, as we nominate in Boston a true New England patriot for president.

Now since most Americans aren't that far to the right, our friends have to portray us Democrats as simply unacceptable, lacking in strength and values. In other words, they need a divided America, but we don't.

So let us join tonight and say to America in a loud, clear voice, send John Kerry. God bless you.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COSTELLO: The party's powerhouses hit the ground running, but will speeches be enough to boost John Kerry's

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 27, 2004 - 05:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: All right, thank you, Rob.
It is day two of the Democratic National Convention in Boston. Tonight the focus will be on John Kerry's personal achievements and life. At the wrap up of day one, former President Clinton had the crowd standing nine times during his speech, and there were other highlights as well.

CNN's Kareen Wynter joins us now live from Boston with more.

Good morning.

KAREEN WYNTER, CNN CORRESPONDENT: Good morning, Carol.

And what a night it was as Democrats united, calling for new leadership as they energized a crowd here at the Fleet Center.

(BEGIN VIDEOTAPE)

WYNTER (voice-over): The first night of the Democratic National Convention brought out an impressive lineup of former political primetime players. Former Vice President Al Gore kicked off the evening.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: I firmly believe America needs new leadership that will make us stronger at home and respected in the world. And we're here this week to present to the nation the man who should be and will be our new president, John Kerry.

WYNTER: Gore criticized President Bush's handling of the economy, budget deficits, the war in Iraq and terrorism, as did former President Jimmy Carter, who pointed out the high stakes in the November election.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: In just 34 months, we have watched with deep concern as all of this good will has been squandered by virtually unbroken series of mistakes and miscalculations.

WYNTER: The night's featured speaker, another former president, Bill Clinton, introduced by wife Hillary, appealed to the party faithful to help lead Kerry to the White House. Mr. Clinton was critical of the current administration's handling of taxes, health care and education. BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: They believe the role of government is to concentrate wealth and power in the hands of those who embrace their economic, political and social views.

(END VIDEOTAPE)

WYNTER: Senator Kerry continues on the campaign trail today in Norfolk, Virginia, Carol. He heads next to Philadelphia.

COSTELLO: Kareen Wynter, live from Boston this morning, thank you.

He's read it through 30 times and still has a day and a half to keep on practicing. Aides say John Edwards knew what he wanted to put in his acceptance speech for vice president almost from the day he was named as John Kerry's running mate.

CNN's Elaine Quijano takes a look at how Edwards is getting ready for the convention.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): Instead of making one last campaign stop in his home state of North Carolina before heading to Boston, Senator John Edwards spent the afternoon at his house in Raleigh, reading over his convention speech.

The senator has a minor cold, and the campaign says he canceled to rest his voice, which sounded strained and raspy during an appearance Monday morning. But aides say he is ready to deliver his speech.

A senior campaign official says Edwards knew what he wanted to say from almost the moment John Kerry chose him as his running mate. Edwards will mention Iraq and will bring back a theme from the primaries, the concept of two Americas. Absent, aides say, the harsh tone that vice presidential candidates have sometimes been known to take. Edwards plans a positive message.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: We're going to reject this tired, old, hateful, negative politics of the past.

QUIJANO: Edwards has three goals for the speech, to introduce John Kerry to the American people, to introduce himself and to explain where the two men would take the country.

(END VIDEOTAPE)

COSTELLO: That was CNN's Elaine Quijano reporting.

John Kerry's blunt talking wife, Teresa, will speak at the Democratic Convention tonight. She is expected to focus on issues like health care and economic security. But she's gotten perhaps a lot of unwanted attention for a testy exchange where she told a newspaperman to shove it.

Heinz Kerry talked about that in an interview with CNN's Bill Hemmer.

(BEGIN VIDEOTAPE)

BILL HEMMER, CNN ANCHOR: Take me back to Sunday night, do you regret telling that reporter to shove it?

TERESA HEINZ KERRY, JOHN KERRY'S WIFE: No. No. I respect reporters and I respect anyone who does their job well. I don't, like anybody else, want to be trapped or be misrepresented intentionally by someone. That's what happened, and I defended myself.

HEMMER: The quote I have is that you said un-American traits.

HEINZ KERRY: No, un-Pennsylvanian.

HEMMER: OK, back up a little bit then. We need to turn back some of the creeping un-Pennsylvanian...

HEINZ KERRY: Traits.

HEMMER: ... and sometimes un-American traits that are creeping in to some of our politics.

HEINZ KERRY: Correct, and that's...

HEMMER: That the way you remember it?

HEINZ KERRY: ... absolutely correct. I would say that again.

HEMMER: And what did the reporter say to you then?

HEINZ KERRY: Un-American activities, which has a very different connotation. It's a political connotation of McCarthy implications, which I would not use unless it was very specific. And I would use it if it was correct, but that's not what I was talking about.

(END VIDEOTAPE)

COSTELLO: You can hear Mrs. Kerry's whole interview in a couple of hours on "AMERICAN MORNING." That begins at 7:00 Eastern. Actually, that would be an hour and a half.

Another of tonight's convention speakers will be Ron Reagan. The son of the late president will put the spotlight on stem cell research. He'll defend the controversial study, which offers medical hope for victims of Alzheimer's disease and other illnesses. President Bush opposes stem cell research because the cells are harvested from fertilized human eggs.

Also in tonight's convention lineup, Howard Dean. The former Vermont governor and ex-presidential candidate is one of the Bush administration's fiercest critics. He says he's not been asked to soften his rhetoric for the address, but he says the party is committed to projecting a positive vision during the convention.

You can watch the big speeches and major moments of the Democratic National Convention right here on CNN live primetime tonight. Ten Eastern our Wolf Blitzer will host the "AMERICA VOTES 2004 SPECIAL." Aaron Brown picks up our coverage at 11:00 Eastern with a "SPECIAL CONVENTION EDITION OF NEWSNIGHT." And at midnight, CNN's Larry King will be live from the Fleet Center in Boston.

The preferred method of terror in Iraq now appears to be kidnapping.

Matthew Chance looks at this disturbing trend.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is the nightmare of every foreigner working in Iraq. Truck drivers, security guards, even a diplomat have been taken hostage; but everyone, include the coalition, the reconstruction effort, or the new Iraqi government, seems a target.

SABBAH KADUM, INTERIOR MINISTRY: Really their intention of the terrorists is to destroy this government. The very fact that has been recognized by a number of countries in the world makes these groups more desperate because now what are they? Do they really have a political program? And if they do, why don't they unmask their faces and show us this program?

CHANCE: But the holding of hostages under the threat of execution is proving an emotionally charged change of tactics, pressuring companies, even countries, to leave Iraq in its chaos.

The biggest success of the hostage takes is the early withdrawal of Philippine forces from Iraq, after one of their nationals, a truck driver, was threatened with execution.

The kidnapping is more than just a problem for foreigners. These Iraqi women are mourning the death of Ahmed Abdullah, a Baghdad goldsmith, kidnapped and killed last week. The scrap of card is a ransom demand for $50,000. It was never paid.

Across Iraq, ordinary families, perceived to have money, live in fear of abductions.

Iraqi officials believe organized criminals, motivated by cash, are involved in the taking of foreign hostages as well.

KADUM: It's the same operation where perhaps they can sell this at a higher price, these organized crime for at a higher price for some of these terrorism groups that are well financed. Whether the groups that originated from Afghanistan or the groups that used to support previous regimes who are also well funded.

CHANCE (on camera): So you believe it may be criminal gangs taking the hostages...

KADUM: Yes.

CHANCE: ... and then selling them up the chain?

KADUM: I think there is evidence of that.

CHANCE (voice-over): The chain reaction raising the stakes for many living and working here.

(END VIDEOTAPE)

CHANCE: Now negotiations to secure the release of these hostages are often secretive, often highly dangerous, as well, but there have been some results. Only yesterday, a senior Egyptian diplomat, Momdoh Kotb, the third highest-ranking diplomat here in Baghdad, who had been held captive by militants since Friday, was set free.

Now the actual details of what it was that took the Egyptian government to get that release have remained under tight wraps. The Egyptian government says that it didn't pay any kind of ransom. But sources tell CNN, sources here in Baghdad, that large amounts of cash did actually change hands paid by the Egyptian government. That's something many countries involved in Iraq will feel is counterproductive and may actually encourage more kidnappings in the future.

COSTELLO: I believe a lot of people might say that, Matthew. So how does this work? Who do they negotiate with, do we know?

CHANCE: It's extremely complex. It involves the whole network of intermediaries, including diplomats, including local figures on the ground. Even Muslim clerics are involved in their role as community leaders to try and get to the hostage takers and either to convince them to give these hostages up or to pass on what kind of deal to broker. To act as go-betweens in any kind of deals that are actually brokered either between countries, as we have seen over the past few days with Egypt, or between the hostage takers and the companies who employ these individuals. At the moment, there are 7 -- sorry, there are 11 truck drivers still in custody across Iraq and their companies are engaged in intensive negotiations to try and get them out, too.

COSTELLO: Matthew Chance, live for us this morning, thank you.

And you can always keep up with what's happening in Iraq by heading to our Web site. We have got the latest developments, along with a special report, "The Struggle for Iraq." It's all at CNN.com.

Here are some stories making news "Across America" this Tuesday.

There will be pretrial hearings today in the Michael Jackson case. The judge will hear arguments on media requests for grand jury transcripts, as well as a defense motion to dismiss the indictment. The hearings could last for several days. Jackson's child molestation trial is set to begin September 13. What the defense is asking for another four months to prepare their case.

In California, a Santa Clara judge is sentenced to 90 days in jail at his punishment -- as his punishment in a ticket-fixing scandal. William Danser will be allowed to serve his sentence under house arrest because of failing health. Danser and a Santa Clara police detective were both found guilty of fixing more than 30 traffic tickets for local celebrities and sports figures. The detective also worked for the San Jose Sharks hockey team.

In Massachusetts, Daniel Holland surrendered his parental rights from a jail cell. Holland is serving a life sentence for killing his wife and allowing his then 8-year-old son Patrick to find the body. Patrick is 14 now and he went to court and has now won the unprecedented right to divorce his father.

A busy night for Salt Lake City police in the ongoing search for a missing pregnant woman. Police used cadaver dogs to search an area landfill. It is the second time police have used the dogs to comb through the trash heap. Lori Hacking was last seen eight days ago at an area park.

We get more now from Sue Thompson of CNN affiliate KSTU in Salt Lake City.

(BEGIN VIDEOTAPE)

SUE THOMPSON, KSTU-TV REPORTER (voice-over): Mark and Lori Hacking's family have stepped back from cameras and away from questions. They now have their own spokesperson, as the investigation into Lori's disappearance zeroes in on Lori's husband even more.

While Mark Hacking remains hospitalized, he has retained Defense Attorney Gil Athay. Athay tells Fox 13, "I have been involved since Thursday evening and have met several times with Mark." Athay is no stranger to tough high-profile cases. Six years ago, Athay defended Ferosa Bluff and Andrew Fedorowicz. The two were convicted of murdering Bluff's 3-year-old daughter. Athay also defended Dale Selby in Ogden's hi-fi murders. Selby killed three people by making them drink drain cleaner.

UNIDENTIFIED FEMALE: Keep track of where you have been, and then come back and tell us so we can send other people out to finish.

THOMPSON: Meantime, searchers went out to again look for Lori. Samarria Burton (ph) has been here since day one. She says she'll stay to help until told otherwise.

UNIDENTIFIED FEMALE: Anyone who wants to come out, we invite them, because that would be helpful, you know, very helpful. And it gives the family hope. And you know, and just kind of keeps the wheel moving, you know, just in the hopes that something will be found and you know something can be resolved.

(END VIDEOTAPE)

COSTELLO: That was Sue Thompson of CNN affiliate KSTU in Salt Lake City.

"The Salt Lake City Tribune," by the way, reports that just three days before her disappearance, Lori Hocking may have found out that her husband was lying about being accepted to medical school. The paper quotes coworker Darren Openshaw (ph) who overhead a phone conversation believed to be with the University of North Carolina.

In the next hour of DAYBREAK, terror preps in the U.K. The step Britain is taking to get its citizens ready for any terrorist attack.

This is DAYBREAK for Tuesday, July 27.

(COMMERCIAL BREAK)

COSTELLO: Your news, money, weather and sports. It is 5:45 Eastern. Here is what's all new this morning.

Power couple Bill and Hillary Clinton fired up the crowd on day one of the Democratic National Convention. Tonight's lineup includes Teresa Heinz Kerry, Teresa Heinz Kerry, Howard Dean and Ron Reagan.

Federal prosecutors are trying to keep Zacarias Moussaui's mental health experts away from him. He's the only U.S. defendant charged with 9/11 crimes. Prosecutors say testing now would make it hard for government experts to evaluate Moussaui's mental health later if there is a death penalty phase in his trial.

In money news, a new feature for your cell phone, Apple Computer and Motorola have signed a deal to put Apple's iTunes music service on cell phones. The deal will make it possible for you to transfer songs from your computer to your Motorola mobile handset.

In culture, teen star Mary-Kate Olsen has been discharged from a treatment facility after six weeks. She was getting help for an eating disorder.

In sports, Minnesota beat Chicago last night. The Twins are now a game and a half ahead of the second place White Sox in the AL Central -- Rob.

ROB MARCIANO, CNN METEOROLOGIST: Carol, a little baseball weather for you across the central part of the U.S.

(WEATHER REPORT)

MARCIANO: See you in about 10 minutes -- Carol.

COSTELLO: We'll be here. Thank you, Rob.

Those are the latest headlines for you.

Time now to check the overseas markets to see what Wall Street investors may be watching.

For that we turn to Todd Benjamin. He's checking the numbers for us in London.

Good morning.

TODD BENJAMIN, CNN CORRESPONDENT: Good morning, Carol.

As you are well aware, the markets really have been struggling among a host of worries, including high oil prices, terrorism, the possibility of slowing economies, slower earnings growth. And finally, though, today, the European markets are up after they eked into negative territory yesterday in terms of the broader market.

Here are where the numbers are at this hour. The FTSE is up here in London just a quarter of 1 percent, but the DAX is up three- quarters of 1 percent in Frankfurt. We had better-than-expected business confidence numbers out of Germany. So that's a real plus there. And the CAC in Paris is up a half percent.

On the confidence note, we're going to get consumer confidence out of the U.S. today, and that will be a key number for the markets, because the consumer, of course, is two-thirds of the economy in terms of spending. And there have been worries about the consumer because of higher gasoline prices and worries about employment.

In terms of what the futures market is pointing to right now, it's pointing to a slightly higher open. And in terms of what the market will be focusing on, not only consumer confidence, but of course we'll continue this slew of earnings for the second quarter. And we'll see if companies are upbeat about guidance going forward.

Carol, have a great morning. Back to you.

COSTELLO: You too. Thank you, Todd.

In this election year, there are still thousands of eligible voters who just don't seem to care about going to the polls. In the next hour of DAYBREAK, a look at voter apathy, and we'll talk with one man determined to change that.

And next, if you have high blood pressure, we'll tell you about the one drink that may help bring it down.

Stay with us. This is DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: "Health Headlines" for you this morning.

Researchers say there may be a link between a sleep disorder and death from stroke. People who suffer from sleep apnea stop breathing for 10 seconds or more while sleeping. New research indicates the disorder may be a new risk factor for stroke deaths.

New genetic research finds that women and men may be seeing things very differently color wise. DNA analysis shows the gene that allows people to see the color red has multiple variations. And the study's coauthor says women's color perception may be more enhanced than men's. But we always knew that, didn't we?

And have a cup of tea, it may help keep your blood pressure down. Researchers in Taiwan found that those who drank Green and Ulong tea were less likely to develop high blood pressure.

For more on this or any other health story, head to our Web site. The address, CNN.com/health.

The Dems get down to the business of red, white and blue in Boston. We'll take you there live at the top of the hour.

For now, we leave you with a taste of politics from the Fleet Center.

(BEGIN VIDEOTAPE)

TERRY MCAULIFFE, DNC CHAIRMAN: The 44th quadrennial National Convention of the Democratic Party will now come to order.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: My friends, fellow Democrats, fellow Americans, I'm going to be candid with you. I had hoped to be back here this week under different circumstances, running for re-election.

(APPLAUSE)

But you know the old saying: You win some, you lose some. And then there's that little-known third category.

(LAUGHTER)

In our Democracy, every vote has power. And never forget that power is yours. Don't let anyone take it away or talk you into throwing it away.

And let's make sure that this time every vote is counted.

(APPLAUSE)

JIMMY CARTER, FMR. PRESIDENT OF THE UNITED STATES: After 9/11, America stood proud -- wounded, but determined and united. A cowardly attack on innocent civilians brought us an unprecedented level of cooperation and understanding around the world. But in just 34 months, we have watched with deep concern as all this good will has been squandered by a virtually unbroken series of mistakes and miscalculations.

(APPLAUSE)

UNIDENTIFIED FEMALE: The trends of who we were on 9/11 should stay with us, a light in the darkness to show us the way.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: If we just have the courage to act on our conviction, we will, by an overwhelming majority, send John Kerry and John Edwards to do their duty for us in the White House starting next year.

B. CLINTON: After three conventions as a candidate or a president, tonight I come to you as a citizen, returning to the role that I have played for most of my life, as a foot soldier in our fight for the future, as we nominate in Boston a true New England patriot for president.

Now since most Americans aren't that far to the right, our friends have to portray us Democrats as simply unacceptable, lacking in strength and values. In other words, they need a divided America, but we don't.

So let us join tonight and say to America in a loud, clear voice, send John Kerry. God bless you.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COSTELLO: The party's powerhouses hit the ground running, but will speeches be enough to boost John Kerry's

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