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American Morning

New Terror Warning; Kobe Bryant Case; Interview With Senator John Kerry

Aired August 02, 2004 - 8:59   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.


HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins. An awful lot to cover this morning regarding these new terror alerts and the cities effected. Some of the basic information now.
The Department of Homeland Security has raised its threat level to orange in the financial sectors of Washington, New York City and northern New Jersey. Named as potential targets the World Bank and IMF Building in Washington, the Citigroup Building, and New York Stock Exchange in New York, and the Prudential Financial facilities in Newark, New Jersey.

This morning, commercial trucks are being diverted away from entering New York by the Holland Tunnel and Brooklyn-Battery Tunnel. This intelligence came to the U.S. over a 72-hour period. Secretary of Homeland Security Tom Ridge says the information is based on multiple reporting streams in multiple locations. And we can now confirm that Pakistani sources say they believe the recent arrests of two al Qaeda suspects there explain the new information. We will get the financial impact of these new warnings when Andy Serwer joins us in just a few minutes.

Also, we'll look at the response to these new warnings as we hear from the people making the decisions at the top. And in just a few minutes, our conversations with Homeland Security Director Tom Ridge. And then later in the hour we'll talk to New York Governor George Pataki.

In the meantime, we bring you Bill Hemmer now, standing by in Grand Rapids, Michigan.

Hey, Bill.

BILL HEMMER, CNN ANCHOR: Hey, Heidi. Good morning from Grand Rapids, Michigan.

We come here today because essentially this town of 200,000 has been politic central. John Kerry has two events here. One kicks off in just about an hour in the firehouse behind me in Grand Rapids. But on Friday, President Bush was in this same town.

Traditionally, the western part of Michigan tends to be Republican territory. But John Kerry coming into this area to see what he can do in terms of his message.

We were supposed to be in Flint, Michigan, this morning at this time, Heidi, but late on Saturday the Kerry campaign made a scheduling change. That's why they are here today, perhaps on the heels of the president's message from Friday afternoon. And if you look at where these two campaigns were over the weekend, Pennsylvania, West Virginia, Ohio, Michigan, many analysts believe these are the states that will decide who is the next president of the United States and who wins this election only 95 days from now. We will get plenty of reaction throughout the hour when Senator John Kerry is my guest a bit later before the event gets under way here in Grand Rapids.

All that coming up this hour. Back to you now in New York City, Heidi.

COLLINS: Battleground states they are. All right, Bill. Thanks so much for that.

HEMMER: Yes.

COLLINS: Jack Cafferty joining us now.

Good morning.

JACK CAFFERTY, CNN ANCHOR: Good morning.

Terrorism very much the wildcard in this presidential campaign. Which man will make the country safer when it comes to the war on terror, President Bush or Senator John Kerry? Your e-mails at am@cnn. And we'll read some of them in a few minutes.

COLLINS: Yes, we will. All right, Jack. Thanks so much.

It's back to business today, but with much tighter security as some of the targets named in the latest terror warning. We get the latest now from CNN's Jeanne Meserve at the World Bank in Washington and Deborah Feyerick at the New York Stock Exchange. We begin this morning with Deb Feyerick.

Deb, hello.

DEBORAH FEYERICK, CNN CORRESPONDENT: Hi, Heidi.

Well, people are coming to work a shade more tense, but they are ready to start the day. A federal law enforcement source telling CNN that the focus right now, determining whether any of those terror operatives are in place and ready to carry out one of the suggested attacks.

Now, intelligence indicates that there were operatives in New York and New Jersey and also D.C. They were conducting surveillance, scouting buildings. In some cases in nearby shops, but also from inside facilities themselves, reconnaissance (ph) search specific.

There are details about meeting rooms, about locations of security cameras as well, and about parking garages. The weapon, most likely a bomb either in a truck or inside some sort of a carry bag like a backpack. Right now, very high security here. Police trying to deter, if not stop an attack altogether -- Heidi. COLLINS: All right. Deb Feyerick, thanks so much for that outside the New York Stock Exchange.

We want to get now to the World Bank in Washington, where Jeanne Meserve is standing by for the latest from there.

Hi, Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Hi, Heidi.

Here the visible signs of security include an increased police presence and increased police searches of trucks because of the concern over vehicle bombs. The mayor, Anthony Williams, says the entire city has been elevated to orange. And he has increased security not just around the World Bank and the IMF, but around other financial institutions, like the Federal Reserve and the Bureau of Engraving and Printing. The U.S. Capital Police, meanwhile, are stepping up their security around the Capitol and also members of Congress.

Residents of Washington, D.C. know this city is a target. The workers we've spoken to this morning seem unfazed by this latest terror warning. But of course we have no way of knowing how many people may not be coming to work because of this latest terror alert.

Heidi, back to you.

COLLINS: All right. Jeanne Meserve, thanks so much for that this morning.

It is the first time the government has issued such specific terror warnings. The threat level is now orange or high for financial centers in New York; Newark, New Jersey; and Washington, D.C. Homeland Security Secretary Tom Ridge spoke with us about the new terror alert.

(BEGIN VIDEOTAPE)

COLLINS: Tell us, what is the purpose of raising this terror threat level to orange only in the financial sector?

TOM RIDGE, HOMELAND SECURITY SECRETARY: The rationale behind focusing on the financial sector is really based on the analysis of all the information we've uncovered in the past and analyzed over the past 24, 48 hours. The specific targeting of the buildings that we identified yesterday showed clearly an interest in trying to effect in their -- in their jaded minds -- the jaded minds of the terrorists somehow influence the economy -- undermine the economy of the United States.

And we had very specific information about these locations and thought it was very important to relate that to the -- the people that work there, to the community leaders and the like. But it seemed right then the information we had now is the emphasis was on the financial sector in the three areas that we mentioned. COLLINS: Does this indicate, though, Secretary Ridge, that there is a plan and coordinated attack in the works and it's just a matter of when?

RIDGE: It certainly indicates that they've taken a long, hard look at several sites. That taken in conjunction with the -- the continuous reference to trying to undermine our democratic process.

There was no mention of when an attack could occur, but we are -- we don't have the luxury of guessing. We have to try to do more and better every single day to prevent an attack, regardless of where it will occur. So, I would say to you that we've identified these particular targets. But that doesn't mean not only in New York City and Washington and northern New Jersey, but every day around the country in every city we're looking to add additional measures to make us safer.

COLLINS: Yesterday you said that with information comes action. What sort of action will the Department of Homeland Security, as well as the leaders of these corporations mentioned, be taking today?

RIDGE: Well, I think the employees at these institutions will probably notice a change in security right away this morning. And the owners of the buildings and the -- the companies and their leadership will be sitting down with the FBI and with our folks at Homeland Security, as well as local security professionals, to see what additional security measures -- you may already see some change in routing around some of these buildings.

So, again, all this information was churned and analyzed, and it's still an ongoing process as we continue to review these sources and deal with them over the past 24 to 36 hours. But we'll make immediate adjustments. I think some of them have been made, and over the next day or two I suspect you'll see even more.

Object: protect these communities, protect these employees, protect Washington and New York and northern New Jersey. But I've got to -- I have to say it again, every single day around the country people are doing more to use additional people and/or technology to make their -- our country safer.

COLLINS: But quickly, today, business as usual?

RIDGE: Today, business as usual. I guess if I -- if I had hope or an aspiration, I would like to see the market go up so that we could send a signal to bin Laden and his crew, you're smart, we're smarter, you're tough, we're tougher, you're resolved, we're more resolved. We had a strong economy before you got -- tried to disrupt us and bring the horror and devastation of September 11, and we have a strong economy after we bring you to justice, too.

(END VIDEOTAPE)

COLLINS: More coverage of the new terror warning is just ahead. The markets open in just a few minutes now under the specific threat to the financial industry. The White House is taking anti-terror measures. A live report from there just ahead.

And New York's Governor George Pataki will be with us at 9:30 Eastern. He led the state through 9/11. Now he's got more work to do.

Meanwhile, Bill Hemmer standing by now in Grand Rapids -- Bill.

HEMMER: Yes, Heidi. Following up his comments from yesterday on CNN and Wolf Blitzer's show on Sunday afternoon, former Democratic presidential candidate Howard Dean charging that the decision to raise the terror threat level may have been an effort to help President Bush politically. Some of what he said to CNN yesterday.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: I am concerned that every time something happens that's not good for President Bush, he plays this trump card, which is terrorism. His whole campaign is based on the notion that "I can keep you safe, therefore, in times of difficulty with America, stick with me." And then out comes Tom Ridge.

It's just impossible to know how much of this is real and how much of this is politics. And I suspect there's some of both in it.

(END VIDEO CLIP)

HEMMER: Dean's remarks quickly denounced by Democratic Senator Joe Lieberman.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: I don't think anybody who has any fairness or is in their right mind would think that the president or Secretary of Homeland Security would raise an alert level and scare people for political reasons. That's outrageous.

(END VIDEO CLIP)

HEMMER: Yes. The Kerry campaign rejecting any suggestion that the terror alert may have been hyped. And a senior Kerry adviser released a statement saying in part -- and quoting now -- "John Kerry and John Edwards will bring all aspects of our nation's power to crush al Qaeda and destroy terrorist networks. No matter what threats we may face, the terrorists will not divide us."

We will talk about his later this hour with Senator Kerry. He'll be my guest here in Grand Rapids.

For now, back to New York and Kelly Wallace looking at the other news and the headlines today.

Kelly, good morning there.

KELLY WALLACE, CNN ANCHOR: Good morning again, Bill. And we look forward to that interview. In the news at this hour in Iraq, that country's leading grand -- leading cleric, Grand Ayatollah Ali al-Sistani, is calling for religious tolerance in the country. At least seven people were killed and more than 60 wounded in a series of coordinated attacks yesterday targeting Iraq's Christian minority. Officials blame insurgent leader Abu Musab al-Zarqawi for the bombings.

Officials in Paraguay are calling it the worst tragedy in almost six decades. At least 275 people were killed yesterday when a fire roared through a crowded supermarket. Police are investigating reports of an exploding gas canister and locked doors that barred escape routes.

The Scott Peterson trial hits the two-month mark today. Last week, the judge refused a defense request to throw out the charges and declare a mistrial. The judge also ruled that jurors could see portions of televised interviews done by Scott Peterson shortly after his wife disappeared. Testimony resumes this morning.

And in sports, the Windy City welcomes Nomar Garciaparra, traded from the Boston Red Sox to the Cubs. Garciaparra supplied a key hit in his first game as a Chicago Cub. He delivered an RBI single to cap a four-run seventh inning that lifted the Cubs past the Philadelphia Phillies 6-3.

Heidi, you can probably say Boston's loss, Chicago's gain.

COLLINS: I bet you probably can.

WALLACE: I bet you can. At least today we can say that.

COLLINS: That's right. And you just did. All right. Kelly Wallace, thanks so much for that.

Let's check back now on the weather and an update on Tropical Storm Alice off the Carolina coast. Chad Myers standing by with more on that.

(WEATHER REPORT)

COLLINS: Still to come this morning, we'll talk live to Democratic presidential nominee John Kerry and find out whether his campaign is ready to come out swinging and why he decided over the weekend to take a detour.

Also ahead, an apology in the Kobe Bryant case. But it didn't come from the accused or his accuser, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: We are live in Grand Rapids, Michigan. You see the stage getting set up here at a firehouse just outside of town. John Kerry will be here within the hour. His first campaign event of the day.

And one of the main pushes today is the plan for America, as the Kerry-Edwards campaign calls it, a book about 250 pages in length to be released today to reporters first, and then the public after that. I want to move away from politics for a moment here. And again, later this hour we'll talk to Senator John Kerry about this and a number of other issues.

Also, though, after repeated leaks of confidential information, including the accuser's identity, the judge in the Kobe Bryant sexual assault case has apologized to the woman's family. What does this mean for the case? Alex Stone, reporter for a Denver radio station KOA covering the pretrial proceedings, live with us today from Denver.

And welcome back here to AMERICAN MORNING. What does it mean for the case with this apology, Alex?

ALEX STONE, REPORTER, KOA RADIO: Well, it's going to be interesting to see what it does mean, Bill, because it was somewhat of a surprise on Friday in court when the judge came out and publicly in open court apologized for -- for the accuser's name being published on a court Web site. This is a public Web site, one that mainly is used by the media to get documents off the site.

The accuser's name is supposed to be blacked out on the site. But this has happened several times now. And the accuser's personal attorney is saying that the accuser, whether or not this was meant to happen, whether or not the judge meant for this to happen, even though the judge says it was a complete mistake, the accuser's personal attorney is saying that the young woman, now 20 years old, does not trust the judge in this case and does not trust the court in this case either.

HEMMER: If that's the case then, what are legal analysts saying and what are your sources saying? Does this push the woman closer to dropping the case or getting out of it altogether, or possibly a mistrial?

STONE: Yes. A lot of legal analysts are saying right now that this may be the first step for this accuser to back out of it, to say that she does not trust the judge and does not trust the court, so she doesn't want anything to do with this case anymore.

A lot of legal analysts are saying it's now 50-50 whether this case will go forward. The D.A. in the case could decide to back out. Still, a settlement could come out.

We're less than a month away from this trial beginning. It begins August 27, Bill, and still a lot could happen. This case could -- and again, there's no sign from the prosecution officially yet -- but this case could completely fall apart before trial time.

HEMMER: Well, also, transcripts may be released this week, possibly as early as today. What is said to be contained in those transcripts?

STONE: Well, we know there is a lot of testimony from a defense expert, Elizabeth Johnson, a DNA expert out of Texas. These were the transcripts that were mistakenly e-mailed to several reporters. And then the court and the Colorado Supreme Court as well said that reporters could not release what was in those transcripts.

Well, now the judge is trying to make somewhat of a middle ground here, and he's saying that he will release redacted copies. So he will take out some of the details, some of the names, some of the -- the aspects that could affect this case. We now understand that it's going through the redaction process and that that will be released most likely sometime tomorrow.

HEMMER: Interesting developments yet again today, possibly. Alex Stone, thanks. KOA Radio there in Denver, Colorado.

More from Grand Rapids in a moment. But for now, back to New York again and Heidi -- Heidi.

COLLINS: All right, Bill. Thanks so much.

There seems to be a break in the case of a missing Utah woman, but Salt Lake police and the families of Lori and Mark Hacking are guarding the information closely. Miguel Marquez is following the story now.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): The mystery surrounding the disappearance of Lori Hacking appears to be somewhat less mysterious after the Hacking and Soares families released a statement hinting that Mark Hacking had admitted to something. It was enough for the families to ask the volunteer searchers to stop searching.

DET. DWAYNE BAIRD, SALT LAKE CITY POLICE: A member of the Hacking family came in and provided additional substantive information. This information, along with other leads, will -- will continue to be followed up on by investigators.

MARQUEZ: Twenty-seven-year-old Lori Hacking, who was pregnant, was reported missing by her husband, Mark, on July 19. Several hours later, he was found naked in a hotel parking lot and taken to a local psychiatric hospital.

Since then, we've learned that the Hackings' life together, which appeared model, was fraught with deception. Mark and Lori Hacking were slated to move to North Carolina, where he said he had been accepted to medical school. The University of North Carolina Chapel Jill says it couldn't even find an application for him.

Hacking also told family that he had graduated from the University of Utah. He had not.

On the day he reported his wife missing, Mark Hacking purchased a mattress. Police later seized a box spring only from the Hackings' residence.

(on camera): Police say Mark Hacking is not in police custody. He remains in a local psychiatric hospital. Police also say they will continue to search a two-acre lot in the local landfill hoping to find the clues to solve the mystery of what happened to Lori Hacking.

Miguel Marquez, CNN, Salt Lake City.

COLLINS: Still to come on AMERICAN MORNING, new hope for people fighting depression.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It was really a time when I knew I had been through all the drugs. I had been through all the talk therapy until I knew more than the therapist. I knew that I was at the end of the line.

(END VIDEO CLIP)

COLLINS: A surprising new way for doctors to treat depression. And it doesn't involve new drugs. We're "Paging Dr. Gupta." Stay with us here on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: A new pacemaker-like device may give new hope to people with severe forms of depression. Dr. Sanjay Gupta has the details now.

Good morning to you, Sanjay.

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Good morning, Heidi.

It's the first time that a device is potentially going to be approved to treat a psychiatric disorder. It's already making a difference for one woman we met. She's been on medications for 30 years, hospitalized 20 times. She reached the end of the line.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): For almost 30 years, Marna Davenport (ph) lived with the secret that almost killed her.

UNIDENTIFIED FEMALE: It was just a hopeless pain, a darkness that you just don't think you're ever going to come back into the real world.

GUPTA: Davenport (ph), a college professor who holds both a Ph.D. and a pilot's license, suffers from severe recurring bouts of depression.

UNIDENTIFIED FEMALE: I knew I had been through the drugs. I was at the end of the line.

GUPTA: Like so many others with this disease, she considered suicide.

UNIDENTIFIED FEMALE: I did feel like killing myself. Only not that I said, "Oh, I want to die." That -- that was not it. It was, I want this pain to stop. I want this unbearable, exhausting, debilitating pain to stop.

GUPTA: That darkness that consumed her is now gone thanks to a pacemaker-like device called a Vagus Nerve Stimulator. Implanted in her chest, it has wires that are wrapped around the nerve located in the neck. Tiny electrical impulses too small to feel tickle or massage the vagus nerve, which then send signals to the part of the brain that controls our emotions, our gut feelings, our heartaches. Though doctors still don't fully understand depression, they have discovered repeated stimulation of this neighborhood of the brain regulates the system, essentially fixing the psychiatric disorder.

DR. MARK GEORGE, DIRECTOR, BRAIN STIMULATION LABORATORY: One of the exciting things about VNS is that it's the beginning of this idea of going straight to specific spots in the brain and over time kind of fixing an abnormal circuit.

GUPTA: Dr. Marriage George and colleagues here at the Medical University of South Carolina say Vagus Nerve Stimulation is considered a last resort. A patient must have tried at least four antidepressants and treatments without relief before they can be considered for this device.

Every month or so the settings are checked and, if necessary, adjusted. No longer suffering from overwhelming hopelessness, Marna (ph) feels like she's finally on a level playing field with the rest of the world.

UNIDENTIFIED FEMALE: I have a little bit more than hope now. I really have the reality that things are going to continue to get better and better.

(END VIDEOTAPE)

GUPTA: It's been a real life changing thing for Marna (ph), obviously. Important to point out, Heidi, though, the antidepressant medications don't stop. You need to take those concurrently with the stimulation. But in her case, it really made a big difference -- Heidi.

COLLINS: Well, Sanjay, how did scientists come about -- or come across this device in the first place?

GUPTA: Well, you know, it's interesting. Vagus Nerve Stimulators have been around for some time to treat epilepsy. But what the doctor found in their patients with epilepsy, they're also getting significant mood improvements.

So they said, hmm, maybe this VNS or Vagus Nerve Stimulator might also fix or help with depression. A clinical trial was under way of which Marna (ph) was a part. And it looks like the results have been pretty positive -- Heidi.

COLLINS: All right. Well, good for her, and the thousands who suffer from the disease. Thanks so much, Sanjay Gupta, this morning.

GUPTA: Thanks.

COLLINS: Want to check in with Jack now and the "Question of the Day" once again.

Hello.

CAFFERTY: How you doing?

With terrorism warnings very much in the news this morning, we thought we'd ask you a question about the campaign and who will keep America safer as we approach Election Day. Do you think it will be President Bush or do you think it will be Senator Kerry?

We got about -- we got over 800 letters.

COLLINS: Did you really?

CAFFERTY: Yes.

Dennis in Crossville, Tennessee, "The 9/11 attacks happened on President Bush's watch while he ignored the PDB" -- that would be the presidential daily briefing -- "titled 'Bin Laden determined to attack in the U.S.' After three years, George W. Bush has not caught the man responsible for those attacks. Meanwhile, he's gotten almost 1,000 of our soldiers killed in a war based on lies in Iraq which has sidetracked the real war on terror. I think John Kerry will keep us safer."

Mike has a different view. "Based on Senator Kerry's record in the Senate, I would imagine Osama bin Laden would do everything in his power to ensure John Kerry is the next American president."

Lynne in Laurel, Maryland, "I'm putting all my support with the Kerry-Edwards ticket with the confidence that they'll better be able to reestablish the broken ties with or allies and in turn get the much needed universal cooperation to help fight a united front against terror."

Patrick in Franklin, Texas, "President Bush has proven time and again to be a man of his word. He does not sway in the political wind, nor does he make claims of worldwide support that he cannot back up. Until it's in their interest, France, Germany and Russia will never commit spit to help America anywhere, anytime."

We'll do one more bunch of these in about 25 minutes.

COLLINS: Very good. All right, Jack. Thanks so much for that.

Still ahead, a live interview with Democratic presidential nominee John Kerry. Hear what he has to say about the new terror warnings.

We'll be back in just a moment.

(COMMERCIAL BREAK) COLLINS: The opening bell ringing on Wall Street now. And you can see all of the people there. We have Mayor Bloomberg, and we have John Thain, and we have Governor George Pataki. We will be talking with him just a little bit later on this morning. Senator Schumer as well, who we heard from a little bit earlier today.

The Dow Jones industrial average starts trading at 10139, up more than 10 points from Friday. And at the Nasdaq market site, the Composite Index opens at 1887. That's up more than just six points.

Here's Andy Serwer now, standing by to tell us a little bit more about what to expect today, especially because of these terror warnings.

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: That's right, Heidi.

Obviously a real show of force at the NYSE with all those officials gathered there, trying to reinsure investors. Indications this morning are that things won't be too disjointed, too disrupted at the start of the trading day.

European exchanges were down, but not significantly. Shares in Europe weren't trading so far off as well. We expected futures to be down a little bit down a little this morning and trading to be down at the open. And it is, in fact, but not too disrupted at all.

COLLINS: All right. That's good to hear.

SERWER: Yes, it is.

COLLINS: Andy Serwer, thanks so much for that.

SERWER: You're welcome.

COLLINS: It is just about half past the hour now on this AMERICAN MORNING. Much more coming up on these latest terror warnings that name five buildings in three states as having been scouted by al Qaeda terrorists. We'll get a report from the White House. Also talk to New York Governor George Pataki.

Also, coming up in just a few minutes, Bill Hemmer is in Grand Rapids, Michigan, this morning, where he will be sitting down with the Democratic nominee for president, John Kerry. We'll get the senator's reaction to new polls showing he didn't get the normal bounce coming out of the Democratic convention that he would have liked.

Meanwhile, we have CNN White House correspondent Suzanne Malveaux standing by with the very latest on the terror threat warnings. She's joining us from the White House.

Suzanne, good morning once again.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. That terrorist alert of course giving even a greater sense of urgency. And the president and his administration responding to the 9/11 Commission's recommendations to reform intelligence. We are told by senior administration officials that the president in about a half an hour is going to be meeting with his cabinet. And then following that, a separate event. The president will announce the recommendations that he is going to endorse.

We have been told that the president will broadly endorse the 9/11 report, that he will introduce his own package of reforms. Some of those reforms going beyond the commission's recommendations regarding protecting privacy, as well as civil liberties. That he is going to highlight those that he can implement by executive order, including creating a greater emphasis and funding on human intelligence and developing national standards for driver's license and other kinds of methods.

Now, when it comes to the main -- the central recommendation here to create a national director of intelligence that would be within the White House, we are told that the administration will go ahead, give the OK to create that position, but that it would be outside of the White House. This is something where the person would -- would report directly to the president. They would oversee all 15 intelligence agencies. But this would not be within the executive office.

The reason why, the Bush administration officials saying that there is some hesitancy that it would not allow the kind of autonomy or independence for that individual to be credible in their position, that it would essentially link the president to possibly faulty intelligence, and even perhaps giving the impression that the president could influence policy, as well -- well, influence intelligence in creating and promoting his own policies. But Heidi, this is something, as you know, a very political subject as well.

We know that John Kerry has called for a full endorsement of all of the 9/11 Commission recommendations. President Bush later this morning coming out endorsing most of them.

COLLINS: All right. Suzanne Malveaux, thanks for that live from the White House this morning.

And just ahead, the governor of New York, George Pataki, will talk about what the state and the city are doing to provide extra security measures here.

The new terror warning may have come from the arrest of al Qaeda operatives in Pakistan. Ahmed Khalfan Ghailani, wanted for the embassy bombings in Kenya and Tanzania, was captured in a raid last week. And a computer engineer who may have been caught at the same time led investigators to "a potential treasure trove of al Qaeda information." Published reports say they say the evidence uncovered reveals how al Qaeda conducts reconnaissance, how information is passed around the world, and its leadership structure.

Thirty-four minutes passed the hour now. Time for a look at some of today's other headlines and Kelly Wallace. Hi, Kelly.

WALLACE: Good morning again, Heidi. Good morning, everyone.

A Turkish trucker's association reportedly will stop transporting goods to U.S. forces in Iraq. The announcement comes as video was posted on the Internet showing what seems to be the killing of a Turkish hostage.

Meantime, a Somali man could be heading home soon. The Arabic language network Al-Jazeera says his captors decided to free the man after his Kuwaiti employer agreed to leave Iraq.

In Louisiana, the trial of Derrick Todd Lee starts this morning. Police say he's the serial killer who terrorized women from April 1998 until March 2003. In the trial that begins today, he is charged with the killing of LSU student Geralyn Desoto (ph). Lee is suspected of killing seven women in all. His DNA was found at the scene of several of those murders.

Human error is being blamed for the grounding of dozens of American Airlines and U.S. Airways flights nationwide on Sunday morning. A computer system that clears aircraft for takeoff failed. American had its planes back up after two hours, while U.S. Airways flights were grounded for about three hours.

The fright flick "The Village" scared crowds of moviegoers into theaters over the weekend. The story of a rural community menaced by monster in the woods pulled in nearly $51 million. Matt Damon's spy thriller, "The Bourne Supremacy," held second place.

Haven't seen either. So can't comment about that.

COLLINS: Yes. I've heard mixed reviews, but I know "The Village" one was supposed to be creepy scary. So I'm holding off on that.

WALLACE: OK.

COLLINS: All right. Kelly, thanks so much.

WALLACE: Sure.

COLLINS: Want to get another check of the weather now, which is also a little scary. Chad Myers at the CNN Center with the latest on Tropical Storm Alex, yes? Still tropical storm?

(WEATHER REPORT)

HEMMER: We are inside the Grand Rapids Fire Department. In a matter of minutes here, we do expect John Kerry, the senator who wants to be the 44th president of the United States, to be my guest. We'll talk to him about the latest terror warnings, his reaction. He has been briefed. We'll talk to him as our coverage continues live on AMERICAN MORNING here in Grand Rapids right after this.

(COMMERCIAL BREAK)

COLLINS: Welcome back.

CAFFERTY: Welcome back, indeed.

The "Question of the Day" has to do with who will keep the country safer, President Bush or John Kerry. The question being asked in light of the terrorist warnings that came out yesterday and the extra security being implemented around places like New York City, Washington, and Newark, New Jersey, this morning.

We've gotten a ton of mail. Kind of, you know, a little of this, a little of that.

Kathryn in Middletown, Connecticut, "I think we're safer with President Bush. The one thing that's come out of the past three years is that when George Bush says he's going to do something, he does it. He gave both the Taliban and Saddam Hussein a deadline, and when it passed, he took action. I think this decisiveness makes us safer."

Diane in Atlanta writes, "Bush and Kerry would both fight the war on terror with equal vigilance. Kerry could easily be more effective by rebuilding relationships with traditional allies and addressing the long-term solutions."

Jim in Cambridge, New York, "After the Democratic National Convention, we now know that a Kerry speech has the ability to rouse a partisan crowd to a state of semi consciousness, and Bush is able to put small children to sleep during a national crisis by reading to them. I think the answer was on '90-Second Pop,' Victoria Gotti is the one to lead us to safety in the war on terror."

Which brings us now to the business news. The future suggesting Wall Street may go south. They don't like this uncertainty when terror warnings are on the rise. Andy Serwer is here "Minding Your Business."

The markets are open. What have we got?

SERWER: Well, probably not as bad as many people might have imagined this morning, Jack. Let's take a look at the Big Board here.

Right away, you can see we're down 24 points, which really ain't a whole lot of anything. I mean, the market can be down 24 points on any given day, obviously.

CAFFERTY: Sure.

SERWER: Citigroup is trading down. That's one of the companies apparently targeted by terrorists, down about 50 cents to $43.

Another stock we're watching this morning, unrelated to terrorists, Apple, it's down 83 cents to $31. CEO Steve Jobs reporting that he has had surgery for a non-lethal form of pancreatic cancer and is recovering. But let's talk a little bit more about Wall Street this morning, Jack. CAFFERTY: I see we had Senator Schumer down there having a little meeting with the press.

SERWER: That's right. We had Mayor Bloomberg, Governor Pataki was down there as well, as well as John Thain, who is the chief executive of the New York Stock Exchange. John Thain and Senator Schumer outside of the New York Stock Exchange. Here's what Senator Schumer had to say.

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D), NEW YORK: If every time they made a threat we stopped doing what we're doing, they'd win. And so we feel it's almost a moral imperative for everybody to go about their jobs. There may be a few butterflies in some stomachs, but you still go forward, you still move forward and do what you have to do.

(END VIDEO CLIP)

SERWER: You know, after 9/11, Jack, obviously a lot of people on Wall Street were very depressed. People had dozens of colleagues who were killed in that tragedy.

This kind of a day brings that all back to them. But I think, if anything, over the past few years, Wall Street and the people who work there have learned to be very resilient. And I think, if anything, they're going to work this morning, you know, understanding the threat and knowing that they have a job to do.

CAFFERTY: Well, and I was watching some of the coverage last night at home on the security that was put in place around the Wall Street and around the stock exchange and some of those buildings downtown. It doesn't get any better than what the New York City Police Department and the people specially trained in fighting terrorism in this city are capable to bring to bear. They've got to be nuts to try anything down there.

SERWER: Yes, I think you're right. I mean, that is a very hard target now. I mean, it's sort of tantamount almost to a military base. A very hard place for someone to get into.

CAFFERTY: Yes. Thanks, Andy.

SERWER: You're welcome.

COLLINS: We are going to talk with Governor Pataki a little bit later on this morning as well. For now, though, we are going to turn things back over to Bill Hemmer, standing by in Grand Rapids once again.

Hi, Bill.

HEMMER: Hey, Heidi.

Awful lot to consider based on what you guys are talking about back there in New York. And certainly there are implications not just in the Northeast, but truly for all Americans across this country.

If you listened to the latest "Newsweek" poll, terrorism was again the number one concern. We'll talk about that very issue with Senator John Kerry in a matter of minutes here live in Grand Rapids as our coverage continues in a moment.

(COMMERCIAL BREAK)

COLLINS: Workers in Washington returned to the World Bank and IMF buildings today knowing they could be walking into danger. As Sean Callebs reports, the tensions are as high as the security.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): A sure sign tighter security has come to the World Bank and IMF buildings in downtown Washington. The World Bank says police cars won't be a constant here. In a glass and steel building along a busy street, excuse employees who work here if they feel somewhat vulnerable.

UNIDENTIFIED MALE: Well, I think anyone feels vulnerable when they hear that there is an increased threat level that affects them here, no matter if they work in Congress or the White House or our institution here at the IMF.

CALLEBS: The World Bank spokesman says he can't talk about specific security changes. There are 7,000 World Bank employees scattered around D.C. Several thousand work here.

UNIDENTIFIED MALE: We want the staff to feel reassured that we are taking the utmost steps to ensure their safety while they're here at the bank.

UNIDENTIFIED FEMALE: This is the nation's capital. And it needs to be safe somewhere. And it must be here.

CALLEBS: Indeed, that is the attitude city leaders wanted citizens to embrace. Threat levels go up and go down. They say it will take more than a threat on financial centers to rattle people in the nation's capital.

MAYOR ANTHONY WILLIAMS (D), DISTRICT OF COLUMBIA: If you're going to shop, entertain friends, whatever you're going to do, continue to do that, because what we're protecting here is our way of life, and we want that way of life to continue, because that is indeed our strength.

CALLEBS: Along with the World Bank and IMF, D.C. police say the Federal Reserve, Bureau of Engraving and other financial buildings will get more attention from officers.

UNIDENTIFIED MALE: They want basically to affect everybody's life, to scare the people. But we are not. We are cautious, but not scared.

CALLEBS (on camera): Officials and financial executives are hoping for business as usual and know they will be able to better gauge reaction once rush hour kicks in, the streets are jammed ,and residents have had a night to sleep on the threats.

Sean Callebs, CNN, Washington.

(END VIDEOTAPE)

COLLINS: The IMF and World Bank headquarters are about two blocks from the White House, as you may know if you are familiar with that area.

All right. You guys have been there. You know what it's like. It is pretty close. People are obviously very -- and honestly nervous about this now.

CAFFERTY: They're nervous about it. But you know what? I'm encouraged.

And the thing that kind of encourages me is to see the response the country is capable of when they get some "credible intelligence," sometime in the last 72 hours or so, reportedly from this Pakistani-al Qaeda fellow that they...

COLLINS: Two of them, yes.

CAFFERTY: ... that they nabbed over there. And, I mean, within hours, they not only are able to alert the country, but they're able to put in place security that looks to me, at least, as -- and I'm no expert -- to be almost impenetrable. I mean, if I'm any kind of a suicide or car bomber, the last place I'm going to try to get to is the World Bank building or the stock exchange...

COLLINS: Certainly now, right.

CAFFERTY: ... or the building in Newark. I mean, we -- we responded, responded quickly, told the public here's what's going on. I mean, that's a far sight from where we were two or three years ago.

COLLINS: That's for sure. It is impressive indeed. All right, Jack. Thanks for that.

And Bill standing by in Grand Rapids once again. Senator Kerry, yes, Bill?

HEMMER: Heidi, thank you. And good morning. And welcome back, everyone, to our special coverage here as campaign 2004 rolls on, just about 94 days before the Americans go to the polls on the 2nd of November to select the 44th president.

Possibly will that be John Kerry, or will they reelect George Bush to a second term? Let's talk to one of the men in focus today. Senator John Kerry my guest here in Grand Rapids.

Good morning to you.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Good morning, Bill. How are you?

HEMMER: I really appreciate -- I'm doing just fine. Thank you.

KERRY: Glad to be here.

HEMMER: I know you've been briefed by the Homeland Security Department regarding the latest terror threat. How serious, in your estimation, is it?

KERRY: Well, they take any threat seriously. What's important, however, is -- is not to sort of bounce along from threat to threat. It's to win the war. And I believe that I can fight a more effective war on terror than George Bush is. I know I can fight a more effective war.

Lee Hamilton, the co-chairman of the 9/11 Commission, has said this administration is not moving with the urgency necessary to respond to our needs. I believe this administration and its policies is actually encouraging the recruitment of terrorists.

We haven't done the work necessary to reach out to other countries. We haven't done the work necessary with the Muslim world. We haven't done the work necessary to protect our own ports, our chemical facilities, our nuclear facilities. There is a long, long list in the 9/11 recommendations that are undone.

This administration fought against the 9/11 Commission, and they haven't even moved rapidly to implement it. I think that we can do better. And that's what I intend to do.

HEMMER: Back to the current day threat...

KERRY: Sure.

HEMMER: ... in the city of New York today, you have traffic in the Lincoln Tunnel shut down, in the Holland tunnel shut down, on the Williamsburg Bridge shut down, all traffic coming in commercially.

KERRY: Sure.

HEMMER: What did the Homeland Security Department tell you specifically about...

(CROSSTALK)

KERRY: Well, I can't tell you what they told me, obviously. It's a secure briefing and a classified briefing. I'm not free to tell you that.

I'm just telling you that you take any threat seriously. The issue is -- I mean, we all have known there are going to be threats. This administration said two years ago it is not a question of "if". It is a question of "when."

Now, if that's true, and they meant what they said, we Americans have a right to ask, well, then, why haven't you moved more rapidly to do the things necessary to make America as safe as possible? We shouldn't be limping along from one piece of information to the next. We should be doing everything necessary to protect our country.

I will do that. I know what to do. I called a year ago or so for the creation of a national director for intelligence. Finally, this administration is getting around to thinking of doing it. We called for a Homeland Security Department a year and a half before they put it together. Finally, they got around to putting it together.

We don't need leadership that kind of drags its feet and finally gets there. We need leadership that leads, that knows how to fight an effective war on terror. I can do a better job.

HEMMER: Yesterday, here on CNN, Governor Howard Dean suggested that there may be an element of politics in this announcement.

KERRY: Well, I haven't suggested -- I don't care what he said. I haven't suggested that, and I won't suggest that.

HEMMER: Are you dismissing yourself or even distancing yourself from Howard Dean at this point?

KERRY: It's not a question of distancing. People have their opinions, other people are entitled to them. I do not hold that opinion. I do not believe that.

KERRY: He held the question, is it politics or is it real, or is it both?

KERRY: Well, he asked the question. It's not my question. I believe you take these threats seriously. I take them seriously.

I think people of good conscience are working on these issues. I respect the men and women in the threat reduction effort. I respect the people who are in the Homeland Security Department.

I don't question them. I question the leadership. I question why it is that we are struggling to get Arab countries and European countries who have a stake in the outcome of the war on terror to be part of it. It's a failure of statesmanship and leadership. And I intend to do better.

HEMMER: In Boston, Howard Dean told us he speaks to you by telephone about every two weeks.

KERRY: Somewhere in that vicinity.

HEMMER: And he said the conversations aren't short, they're actually pretty long in discussion.

KERRY: We've had some good conversations.

HEMMER: And he's a surrogate for your campaign.

KERRY: Yes, he is. HEMMER: Based on his comments yesterday...

KERRY: I disagree with his comment yesterday. It's very simple.

HEMMER: Will he stay on your campaign?

KERRY: Absolutely. He's done a very, very good job. He has his opinions. I respect those opinions. But I happen to differ with him on this one.

HEMMER: Let's talk about the polling numbers. The CNN-"USA Today"-Gallup poll came out reflecting on Boston again, on the screen for our viewers. Registered voters give you a slight lead. In a two- man race with George Bush, 50 to 47 percent. Likely voters, though, show you actually trailing 50 to 47 percentage...

KERRY: Yes, but none of that means anything right now, Bill.

HEMMER: It doesn't mean anything?

KERRY: No, it doesn't mean anything. First of all, it doesn't mean anything because you don't know who the likely voters are.

We're registering people. There are countless numbers of new people who are going to come into the system. All of these polls I think are so wacky, because frankly, they don't know what the political dynamic is this year. That's number one.

Number two, I don't pay attention to polls. If I paid attention to polls, I would have stopped getting up in the morning last December. I mean, I -- polls are meaningless to me.

What matters to me are the people in Grand Rapids and the people in Michigan, and the people in Ohio that I've been talking to who want health care. They want jobs. They don't want to see their jobs going overseas and be replaced by a job that pays $9,000 less.

We can do a better job of moving our economy. And just today, I've put out a book. John Edwards and I put out a book today saying our plan for America. It's a positive vision of how we can put people back to work.

I have a plan for health care for all Americans. The other side has had four years to come up with a plan for health care. They don't have a plan. I have a plan to provide health care to all Americans, and I show how we're going to pay for it.

What people want to know is, how are you going to make my life better, what are you going to do to help us, and to have a government that's as good as the hopes of the American people? I believe we're going to do that.

HEMMER: Back to the question of polling, though, your own campaign...

KERRY: Boy, you're incessant, aren't you? You won't quit on this polling thing.

HEMMER: Well, HEMMER: not too -- just a follow-up. That's fair. You spent thousands of dollars trying to figure out which way the wind is blowing in this country.

KERRY: No, wrong. Wrong. Wrong. Wrong.

You go back and look at Tim Russert's interview with me. When I announced the formation of a committee to start to run for president over two years ago, what did I say? I said the issue is security. The security of our nation, job security, wage security, income security, health security, education. And every one of those issues are the issues I have consistently run on.

The plans I laid out a year and a half ago are the plans I'm talking about today. There's nothing that's shifting in what I'm proposing.

I laid out on the Senate floor, when we voted about Saddam Hussein, exactly how you wage a war on terror effectively. The president chose not to do the things I suggested. And now we're spending billions of dollars.

We've lost too many lives because he rushed to war without a plan to win the peace. I can fight a more effective war on terror, and I'm going to get our troops home faster and more effectively than George Bush is.

HEMMER: Over the weekend, George Bush was out on the campaign trail himself, hitting many of the same stops you are, in places like...

KERRY: Yes, they're sort of following us around. It's kind of interesting.

HEMMER: I think at one point, what, you came within 20 miles of one another. He never refers to you by name. He just says "my opponent." How do you refer to him?

KERRY: The president. He's the president. I respect the fact that he's the president. But I don't refer to him.

I rarely -- I talk occasionally about his plan or no plan. But I talk about our plans. I've got too much that I want to talk about that's positive for America. I don't need to talk about George Bush.

I want to talk about how we're going to have health care for every single American. We have a plan. And under my plan, we roll back -- here's how I mention George Bush -- we roll back George Bush's tax cut for the wealthiest Americans, and we invest the money in health care and education.

I use that money to help our kids to be able to have after-school programs and to be able to have the ability to go to college. A lot of kids are having trouble with college loans today. I'm going to raise those loans. And we're going to give a $4,000 tuition tax credit to parents to empower them to be able to pay the tuitions. This is a positive vision, Bill. And I don't need to spend my time on George Bush.

HEMMER: We are almost out of time.

KERRY: There, I mentioned his name again.

HEMMER: Yes, you did, twice, I think. You went two for two in a softball game rumor has it. It was yesterday?

KERRY: I went two for tow in a couple innings. Yes, we had fun.

HEMMER: Are you having fun on this campaign?

KERRY: I'm having a ball. When I get to play softball, I'm having a ball.

HEMMER: You will be 61 in December. Everyone knows you snowboard in Idaho and you -- and you...

KERRY: Well, I feel like I'm 35. I feel terrific. I feel -- you know, what you can do and how you feel is in your head. And if you -- if you, you know, sort of have fun with life, and I do, you just keep going out until your body tells you don't do it.

HEMMER: We appreciate your time. You have two stops in Grand Rapids, then it's on to Wisconsin I believe. Is that right on that?

KERRY: Yes, sir. I think. No, I know.

HEMMER: Thank you for your time.

KERRY: Thanks a lot.

HEMMER: We'll see you down the road.

KERRY: Yes, sir.

HEMMER: That does it for this coverage here on this special edition of AMERICAN MORNING live in Grand Rapids, Michigan. Our coverage continues throughout the campaign, along the Election Express, the bus that will take us from coast to coast as we lead up to the big day on the 2nd of November.

I'm Bill Hemmer live in Grand Rapids. Are coverage continues in a moment here now with Daryn Kagan at the CNN Center in Atlanta.

Daryn, good morning there.

DARYN KAGAN, CNN ANCHOR: Bill, good morning to you. Safe travels back to New York City. We'll get started here in Atlanta.

HEMMER: Thank you.

KAGAN: Good morning. We're at CNN headquarters in Atlanta. I'm Daryn Kagan.

There are new terror alerts in New York, Washington and New Jersey today. And a senior intelligence source tells CNN arrests in Pakistan may be the reason.

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 August 2, 2004 - 8:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins. An awful lot to cover this morning regarding these new terror alerts and the cities effected. Some of the basic information now.
The Department of Homeland Security has raised its threat level to orange in the financial sectors of Washington, New York City and northern New Jersey. Named as potential targets the World Bank and IMF Building in Washington, the Citigroup Building, and New York Stock Exchange in New York, and the Prudential Financial facilities in Newark, New Jersey.

This morning, commercial trucks are being diverted away from entering New York by the Holland Tunnel and Brooklyn-Battery Tunnel. This intelligence came to the U.S. over a 72-hour period. Secretary of Homeland Security Tom Ridge says the information is based on multiple reporting streams in multiple locations. And we can now confirm that Pakistani sources say they believe the recent arrests of two al Qaeda suspects there explain the new information. We will get the financial impact of these new warnings when Andy Serwer joins us in just a few minutes.

Also, we'll look at the response to these new warnings as we hear from the people making the decisions at the top. And in just a few minutes, our conversations with Homeland Security Director Tom Ridge. And then later in the hour we'll talk to New York Governor George Pataki.

In the meantime, we bring you Bill Hemmer now, standing by in Grand Rapids, Michigan.

Hey, Bill.

BILL HEMMER, CNN ANCHOR: Hey, Heidi. Good morning from Grand Rapids, Michigan.

We come here today because essentially this town of 200,000 has been politic central. John Kerry has two events here. One kicks off in just about an hour in the firehouse behind me in Grand Rapids. But on Friday, President Bush was in this same town.

Traditionally, the western part of Michigan tends to be Republican territory. But John Kerry coming into this area to see what he can do in terms of his message.

We were supposed to be in Flint, Michigan, this morning at this time, Heidi, but late on Saturday the Kerry campaign made a scheduling change. That's why they are here today, perhaps on the heels of the president's message from Friday afternoon. And if you look at where these two campaigns were over the weekend, Pennsylvania, West Virginia, Ohio, Michigan, many analysts believe these are the states that will decide who is the next president of the United States and who wins this election only 95 days from now. We will get plenty of reaction throughout the hour when Senator John Kerry is my guest a bit later before the event gets under way here in Grand Rapids.

All that coming up this hour. Back to you now in New York City, Heidi.

COLLINS: Battleground states they are. All right, Bill. Thanks so much for that.

HEMMER: Yes.

COLLINS: Jack Cafferty joining us now.

Good morning.

JACK CAFFERTY, CNN ANCHOR: Good morning.

Terrorism very much the wildcard in this presidential campaign. Which man will make the country safer when it comes to the war on terror, President Bush or Senator John Kerry? Your e-mails at am@cnn. And we'll read some of them in a few minutes.

COLLINS: Yes, we will. All right, Jack. Thanks so much.

It's back to business today, but with much tighter security as some of the targets named in the latest terror warning. We get the latest now from CNN's Jeanne Meserve at the World Bank in Washington and Deborah Feyerick at the New York Stock Exchange. We begin this morning with Deb Feyerick.

Deb, hello.

DEBORAH FEYERICK, CNN CORRESPONDENT: Hi, Heidi.

Well, people are coming to work a shade more tense, but they are ready to start the day. A federal law enforcement source telling CNN that the focus right now, determining whether any of those terror operatives are in place and ready to carry out one of the suggested attacks.

Now, intelligence indicates that there were operatives in New York and New Jersey and also D.C. They were conducting surveillance, scouting buildings. In some cases in nearby shops, but also from inside facilities themselves, reconnaissance (ph) search specific.

There are details about meeting rooms, about locations of security cameras as well, and about parking garages. The weapon, most likely a bomb either in a truck or inside some sort of a carry bag like a backpack. Right now, very high security here. Police trying to deter, if not stop an attack altogether -- Heidi. COLLINS: All right. Deb Feyerick, thanks so much for that outside the New York Stock Exchange.

We want to get now to the World Bank in Washington, where Jeanne Meserve is standing by for the latest from there.

Hi, Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Hi, Heidi.

Here the visible signs of security include an increased police presence and increased police searches of trucks because of the concern over vehicle bombs. The mayor, Anthony Williams, says the entire city has been elevated to orange. And he has increased security not just around the World Bank and the IMF, but around other financial institutions, like the Federal Reserve and the Bureau of Engraving and Printing. The U.S. Capital Police, meanwhile, are stepping up their security around the Capitol and also members of Congress.

Residents of Washington, D.C. know this city is a target. The workers we've spoken to this morning seem unfazed by this latest terror warning. But of course we have no way of knowing how many people may not be coming to work because of this latest terror alert.

Heidi, back to you.

COLLINS: All right. Jeanne Meserve, thanks so much for that this morning.

It is the first time the government has issued such specific terror warnings. The threat level is now orange or high for financial centers in New York; Newark, New Jersey; and Washington, D.C. Homeland Security Secretary Tom Ridge spoke with us about the new terror alert.

(BEGIN VIDEOTAPE)

COLLINS: Tell us, what is the purpose of raising this terror threat level to orange only in the financial sector?

TOM RIDGE, HOMELAND SECURITY SECRETARY: The rationale behind focusing on the financial sector is really based on the analysis of all the information we've uncovered in the past and analyzed over the past 24, 48 hours. The specific targeting of the buildings that we identified yesterday showed clearly an interest in trying to effect in their -- in their jaded minds -- the jaded minds of the terrorists somehow influence the economy -- undermine the economy of the United States.

And we had very specific information about these locations and thought it was very important to relate that to the -- the people that work there, to the community leaders and the like. But it seemed right then the information we had now is the emphasis was on the financial sector in the three areas that we mentioned. COLLINS: Does this indicate, though, Secretary Ridge, that there is a plan and coordinated attack in the works and it's just a matter of when?

RIDGE: It certainly indicates that they've taken a long, hard look at several sites. That taken in conjunction with the -- the continuous reference to trying to undermine our democratic process.

There was no mention of when an attack could occur, but we are -- we don't have the luxury of guessing. We have to try to do more and better every single day to prevent an attack, regardless of where it will occur. So, I would say to you that we've identified these particular targets. But that doesn't mean not only in New York City and Washington and northern New Jersey, but every day around the country in every city we're looking to add additional measures to make us safer.

COLLINS: Yesterday you said that with information comes action. What sort of action will the Department of Homeland Security, as well as the leaders of these corporations mentioned, be taking today?

RIDGE: Well, I think the employees at these institutions will probably notice a change in security right away this morning. And the owners of the buildings and the -- the companies and their leadership will be sitting down with the FBI and with our folks at Homeland Security, as well as local security professionals, to see what additional security measures -- you may already see some change in routing around some of these buildings.

So, again, all this information was churned and analyzed, and it's still an ongoing process as we continue to review these sources and deal with them over the past 24 to 36 hours. But we'll make immediate adjustments. I think some of them have been made, and over the next day or two I suspect you'll see even more.

Object: protect these communities, protect these employees, protect Washington and New York and northern New Jersey. But I've got to -- I have to say it again, every single day around the country people are doing more to use additional people and/or technology to make their -- our country safer.

COLLINS: But quickly, today, business as usual?

RIDGE: Today, business as usual. I guess if I -- if I had hope or an aspiration, I would like to see the market go up so that we could send a signal to bin Laden and his crew, you're smart, we're smarter, you're tough, we're tougher, you're resolved, we're more resolved. We had a strong economy before you got -- tried to disrupt us and bring the horror and devastation of September 11, and we have a strong economy after we bring you to justice, too.

(END VIDEOTAPE)

COLLINS: More coverage of the new terror warning is just ahead. The markets open in just a few minutes now under the specific threat to the financial industry. The White House is taking anti-terror measures. A live report from there just ahead.

And New York's Governor George Pataki will be with us at 9:30 Eastern. He led the state through 9/11. Now he's got more work to do.

Meanwhile, Bill Hemmer standing by now in Grand Rapids -- Bill.

HEMMER: Yes, Heidi. Following up his comments from yesterday on CNN and Wolf Blitzer's show on Sunday afternoon, former Democratic presidential candidate Howard Dean charging that the decision to raise the terror threat level may have been an effort to help President Bush politically. Some of what he said to CNN yesterday.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: I am concerned that every time something happens that's not good for President Bush, he plays this trump card, which is terrorism. His whole campaign is based on the notion that "I can keep you safe, therefore, in times of difficulty with America, stick with me." And then out comes Tom Ridge.

It's just impossible to know how much of this is real and how much of this is politics. And I suspect there's some of both in it.

(END VIDEO CLIP)

HEMMER: Dean's remarks quickly denounced by Democratic Senator Joe Lieberman.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: I don't think anybody who has any fairness or is in their right mind would think that the president or Secretary of Homeland Security would raise an alert level and scare people for political reasons. That's outrageous.

(END VIDEO CLIP)

HEMMER: Yes. The Kerry campaign rejecting any suggestion that the terror alert may have been hyped. And a senior Kerry adviser released a statement saying in part -- and quoting now -- "John Kerry and John Edwards will bring all aspects of our nation's power to crush al Qaeda and destroy terrorist networks. No matter what threats we may face, the terrorists will not divide us."

We will talk about his later this hour with Senator Kerry. He'll be my guest here in Grand Rapids.

For now, back to New York and Kelly Wallace looking at the other news and the headlines today.

Kelly, good morning there.

KELLY WALLACE, CNN ANCHOR: Good morning again, Bill. And we look forward to that interview. In the news at this hour in Iraq, that country's leading grand -- leading cleric, Grand Ayatollah Ali al-Sistani, is calling for religious tolerance in the country. At least seven people were killed and more than 60 wounded in a series of coordinated attacks yesterday targeting Iraq's Christian minority. Officials blame insurgent leader Abu Musab al-Zarqawi for the bombings.

Officials in Paraguay are calling it the worst tragedy in almost six decades. At least 275 people were killed yesterday when a fire roared through a crowded supermarket. Police are investigating reports of an exploding gas canister and locked doors that barred escape routes.

The Scott Peterson trial hits the two-month mark today. Last week, the judge refused a defense request to throw out the charges and declare a mistrial. The judge also ruled that jurors could see portions of televised interviews done by Scott Peterson shortly after his wife disappeared. Testimony resumes this morning.

And in sports, the Windy City welcomes Nomar Garciaparra, traded from the Boston Red Sox to the Cubs. Garciaparra supplied a key hit in his first game as a Chicago Cub. He delivered an RBI single to cap a four-run seventh inning that lifted the Cubs past the Philadelphia Phillies 6-3.

Heidi, you can probably say Boston's loss, Chicago's gain.

COLLINS: I bet you probably can.

WALLACE: I bet you can. At least today we can say that.

COLLINS: That's right. And you just did. All right. Kelly Wallace, thanks so much for that.

Let's check back now on the weather and an update on Tropical Storm Alice off the Carolina coast. Chad Myers standing by with more on that.

(WEATHER REPORT)

COLLINS: Still to come this morning, we'll talk live to Democratic presidential nominee John Kerry and find out whether his campaign is ready to come out swinging and why he decided over the weekend to take a detour.

Also ahead, an apology in the Kobe Bryant case. But it didn't come from the accused or his accuser, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: We are live in Grand Rapids, Michigan. You see the stage getting set up here at a firehouse just outside of town. John Kerry will be here within the hour. His first campaign event of the day.

And one of the main pushes today is the plan for America, as the Kerry-Edwards campaign calls it, a book about 250 pages in length to be released today to reporters first, and then the public after that. I want to move away from politics for a moment here. And again, later this hour we'll talk to Senator John Kerry about this and a number of other issues.

Also, though, after repeated leaks of confidential information, including the accuser's identity, the judge in the Kobe Bryant sexual assault case has apologized to the woman's family. What does this mean for the case? Alex Stone, reporter for a Denver radio station KOA covering the pretrial proceedings, live with us today from Denver.

And welcome back here to AMERICAN MORNING. What does it mean for the case with this apology, Alex?

ALEX STONE, REPORTER, KOA RADIO: Well, it's going to be interesting to see what it does mean, Bill, because it was somewhat of a surprise on Friday in court when the judge came out and publicly in open court apologized for -- for the accuser's name being published on a court Web site. This is a public Web site, one that mainly is used by the media to get documents off the site.

The accuser's name is supposed to be blacked out on the site. But this has happened several times now. And the accuser's personal attorney is saying that the accuser, whether or not this was meant to happen, whether or not the judge meant for this to happen, even though the judge says it was a complete mistake, the accuser's personal attorney is saying that the young woman, now 20 years old, does not trust the judge in this case and does not trust the court in this case either.

HEMMER: If that's the case then, what are legal analysts saying and what are your sources saying? Does this push the woman closer to dropping the case or getting out of it altogether, or possibly a mistrial?

STONE: Yes. A lot of legal analysts are saying right now that this may be the first step for this accuser to back out of it, to say that she does not trust the judge and does not trust the court, so she doesn't want anything to do with this case anymore.

A lot of legal analysts are saying it's now 50-50 whether this case will go forward. The D.A. in the case could decide to back out. Still, a settlement could come out.

We're less than a month away from this trial beginning. It begins August 27, Bill, and still a lot could happen. This case could -- and again, there's no sign from the prosecution officially yet -- but this case could completely fall apart before trial time.

HEMMER: Well, also, transcripts may be released this week, possibly as early as today. What is said to be contained in those transcripts?

STONE: Well, we know there is a lot of testimony from a defense expert, Elizabeth Johnson, a DNA expert out of Texas. These were the transcripts that were mistakenly e-mailed to several reporters. And then the court and the Colorado Supreme Court as well said that reporters could not release what was in those transcripts.

Well, now the judge is trying to make somewhat of a middle ground here, and he's saying that he will release redacted copies. So he will take out some of the details, some of the names, some of the -- the aspects that could affect this case. We now understand that it's going through the redaction process and that that will be released most likely sometime tomorrow.

HEMMER: Interesting developments yet again today, possibly. Alex Stone, thanks. KOA Radio there in Denver, Colorado.

More from Grand Rapids in a moment. But for now, back to New York again and Heidi -- Heidi.

COLLINS: All right, Bill. Thanks so much.

There seems to be a break in the case of a missing Utah woman, but Salt Lake police and the families of Lori and Mark Hacking are guarding the information closely. Miguel Marquez is following the story now.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): The mystery surrounding the disappearance of Lori Hacking appears to be somewhat less mysterious after the Hacking and Soares families released a statement hinting that Mark Hacking had admitted to something. It was enough for the families to ask the volunteer searchers to stop searching.

DET. DWAYNE BAIRD, SALT LAKE CITY POLICE: A member of the Hacking family came in and provided additional substantive information. This information, along with other leads, will -- will continue to be followed up on by investigators.

MARQUEZ: Twenty-seven-year-old Lori Hacking, who was pregnant, was reported missing by her husband, Mark, on July 19. Several hours later, he was found naked in a hotel parking lot and taken to a local psychiatric hospital.

Since then, we've learned that the Hackings' life together, which appeared model, was fraught with deception. Mark and Lori Hacking were slated to move to North Carolina, where he said he had been accepted to medical school. The University of North Carolina Chapel Jill says it couldn't even find an application for him.

Hacking also told family that he had graduated from the University of Utah. He had not.

On the day he reported his wife missing, Mark Hacking purchased a mattress. Police later seized a box spring only from the Hackings' residence.

(on camera): Police say Mark Hacking is not in police custody. He remains in a local psychiatric hospital. Police also say they will continue to search a two-acre lot in the local landfill hoping to find the clues to solve the mystery of what happened to Lori Hacking.

Miguel Marquez, CNN, Salt Lake City.

COLLINS: Still to come on AMERICAN MORNING, new hope for people fighting depression.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It was really a time when I knew I had been through all the drugs. I had been through all the talk therapy until I knew more than the therapist. I knew that I was at the end of the line.

(END VIDEO CLIP)

COLLINS: A surprising new way for doctors to treat depression. And it doesn't involve new drugs. We're "Paging Dr. Gupta." Stay with us here on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: A new pacemaker-like device may give new hope to people with severe forms of depression. Dr. Sanjay Gupta has the details now.

Good morning to you, Sanjay.

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Good morning, Heidi.

It's the first time that a device is potentially going to be approved to treat a psychiatric disorder. It's already making a difference for one woman we met. She's been on medications for 30 years, hospitalized 20 times. She reached the end of the line.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): For almost 30 years, Marna Davenport (ph) lived with the secret that almost killed her.

UNIDENTIFIED FEMALE: It was just a hopeless pain, a darkness that you just don't think you're ever going to come back into the real world.

GUPTA: Davenport (ph), a college professor who holds both a Ph.D. and a pilot's license, suffers from severe recurring bouts of depression.

UNIDENTIFIED FEMALE: I knew I had been through the drugs. I was at the end of the line.

GUPTA: Like so many others with this disease, she considered suicide.

UNIDENTIFIED FEMALE: I did feel like killing myself. Only not that I said, "Oh, I want to die." That -- that was not it. It was, I want this pain to stop. I want this unbearable, exhausting, debilitating pain to stop.

GUPTA: That darkness that consumed her is now gone thanks to a pacemaker-like device called a Vagus Nerve Stimulator. Implanted in her chest, it has wires that are wrapped around the nerve located in the neck. Tiny electrical impulses too small to feel tickle or massage the vagus nerve, which then send signals to the part of the brain that controls our emotions, our gut feelings, our heartaches. Though doctors still don't fully understand depression, they have discovered repeated stimulation of this neighborhood of the brain regulates the system, essentially fixing the psychiatric disorder.

DR. MARK GEORGE, DIRECTOR, BRAIN STIMULATION LABORATORY: One of the exciting things about VNS is that it's the beginning of this idea of going straight to specific spots in the brain and over time kind of fixing an abnormal circuit.

GUPTA: Dr. Marriage George and colleagues here at the Medical University of South Carolina say Vagus Nerve Stimulation is considered a last resort. A patient must have tried at least four antidepressants and treatments without relief before they can be considered for this device.

Every month or so the settings are checked and, if necessary, adjusted. No longer suffering from overwhelming hopelessness, Marna (ph) feels like she's finally on a level playing field with the rest of the world.

UNIDENTIFIED FEMALE: I have a little bit more than hope now. I really have the reality that things are going to continue to get better and better.

(END VIDEOTAPE)

GUPTA: It's been a real life changing thing for Marna (ph), obviously. Important to point out, Heidi, though, the antidepressant medications don't stop. You need to take those concurrently with the stimulation. But in her case, it really made a big difference -- Heidi.

COLLINS: Well, Sanjay, how did scientists come about -- or come across this device in the first place?

GUPTA: Well, you know, it's interesting. Vagus Nerve Stimulators have been around for some time to treat epilepsy. But what the doctor found in their patients with epilepsy, they're also getting significant mood improvements.

So they said, hmm, maybe this VNS or Vagus Nerve Stimulator might also fix or help with depression. A clinical trial was under way of which Marna (ph) was a part. And it looks like the results have been pretty positive -- Heidi.

COLLINS: All right. Well, good for her, and the thousands who suffer from the disease. Thanks so much, Sanjay Gupta, this morning.

GUPTA: Thanks.

COLLINS: Want to check in with Jack now and the "Question of the Day" once again.

Hello.

CAFFERTY: How you doing?

With terrorism warnings very much in the news this morning, we thought we'd ask you a question about the campaign and who will keep America safer as we approach Election Day. Do you think it will be President Bush or do you think it will be Senator Kerry?

We got about -- we got over 800 letters.

COLLINS: Did you really?

CAFFERTY: Yes.

Dennis in Crossville, Tennessee, "The 9/11 attacks happened on President Bush's watch while he ignored the PDB" -- that would be the presidential daily briefing -- "titled 'Bin Laden determined to attack in the U.S.' After three years, George W. Bush has not caught the man responsible for those attacks. Meanwhile, he's gotten almost 1,000 of our soldiers killed in a war based on lies in Iraq which has sidetracked the real war on terror. I think John Kerry will keep us safer."

Mike has a different view. "Based on Senator Kerry's record in the Senate, I would imagine Osama bin Laden would do everything in his power to ensure John Kerry is the next American president."

Lynne in Laurel, Maryland, "I'm putting all my support with the Kerry-Edwards ticket with the confidence that they'll better be able to reestablish the broken ties with or allies and in turn get the much needed universal cooperation to help fight a united front against terror."

Patrick in Franklin, Texas, "President Bush has proven time and again to be a man of his word. He does not sway in the political wind, nor does he make claims of worldwide support that he cannot back up. Until it's in their interest, France, Germany and Russia will never commit spit to help America anywhere, anytime."

We'll do one more bunch of these in about 25 minutes.

COLLINS: Very good. All right, Jack. Thanks so much for that.

Still ahead, a live interview with Democratic presidential nominee John Kerry. Hear what he has to say about the new terror warnings.

We'll be back in just a moment.

(COMMERCIAL BREAK) COLLINS: The opening bell ringing on Wall Street now. And you can see all of the people there. We have Mayor Bloomberg, and we have John Thain, and we have Governor George Pataki. We will be talking with him just a little bit later on this morning. Senator Schumer as well, who we heard from a little bit earlier today.

The Dow Jones industrial average starts trading at 10139, up more than 10 points from Friday. And at the Nasdaq market site, the Composite Index opens at 1887. That's up more than just six points.

Here's Andy Serwer now, standing by to tell us a little bit more about what to expect today, especially because of these terror warnings.

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: That's right, Heidi.

Obviously a real show of force at the NYSE with all those officials gathered there, trying to reinsure investors. Indications this morning are that things won't be too disjointed, too disrupted at the start of the trading day.

European exchanges were down, but not significantly. Shares in Europe weren't trading so far off as well. We expected futures to be down a little bit down a little this morning and trading to be down at the open. And it is, in fact, but not too disrupted at all.

COLLINS: All right. That's good to hear.

SERWER: Yes, it is.

COLLINS: Andy Serwer, thanks so much for that.

SERWER: You're welcome.

COLLINS: It is just about half past the hour now on this AMERICAN MORNING. Much more coming up on these latest terror warnings that name five buildings in three states as having been scouted by al Qaeda terrorists. We'll get a report from the White House. Also talk to New York Governor George Pataki.

Also, coming up in just a few minutes, Bill Hemmer is in Grand Rapids, Michigan, this morning, where he will be sitting down with the Democratic nominee for president, John Kerry. We'll get the senator's reaction to new polls showing he didn't get the normal bounce coming out of the Democratic convention that he would have liked.

Meanwhile, we have CNN White House correspondent Suzanne Malveaux standing by with the very latest on the terror threat warnings. She's joining us from the White House.

Suzanne, good morning once again.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. That terrorist alert of course giving even a greater sense of urgency. And the president and his administration responding to the 9/11 Commission's recommendations to reform intelligence. We are told by senior administration officials that the president in about a half an hour is going to be meeting with his cabinet. And then following that, a separate event. The president will announce the recommendations that he is going to endorse.

We have been told that the president will broadly endorse the 9/11 report, that he will introduce his own package of reforms. Some of those reforms going beyond the commission's recommendations regarding protecting privacy, as well as civil liberties. That he is going to highlight those that he can implement by executive order, including creating a greater emphasis and funding on human intelligence and developing national standards for driver's license and other kinds of methods.

Now, when it comes to the main -- the central recommendation here to create a national director of intelligence that would be within the White House, we are told that the administration will go ahead, give the OK to create that position, but that it would be outside of the White House. This is something where the person would -- would report directly to the president. They would oversee all 15 intelligence agencies. But this would not be within the executive office.

The reason why, the Bush administration officials saying that there is some hesitancy that it would not allow the kind of autonomy or independence for that individual to be credible in their position, that it would essentially link the president to possibly faulty intelligence, and even perhaps giving the impression that the president could influence policy, as well -- well, influence intelligence in creating and promoting his own policies. But Heidi, this is something, as you know, a very political subject as well.

We know that John Kerry has called for a full endorsement of all of the 9/11 Commission recommendations. President Bush later this morning coming out endorsing most of them.

COLLINS: All right. Suzanne Malveaux, thanks for that live from the White House this morning.

And just ahead, the governor of New York, George Pataki, will talk about what the state and the city are doing to provide extra security measures here.

The new terror warning may have come from the arrest of al Qaeda operatives in Pakistan. Ahmed Khalfan Ghailani, wanted for the embassy bombings in Kenya and Tanzania, was captured in a raid last week. And a computer engineer who may have been caught at the same time led investigators to "a potential treasure trove of al Qaeda information." Published reports say they say the evidence uncovered reveals how al Qaeda conducts reconnaissance, how information is passed around the world, and its leadership structure.

Thirty-four minutes passed the hour now. Time for a look at some of today's other headlines and Kelly Wallace. Hi, Kelly.

WALLACE: Good morning again, Heidi. Good morning, everyone.

A Turkish trucker's association reportedly will stop transporting goods to U.S. forces in Iraq. The announcement comes as video was posted on the Internet showing what seems to be the killing of a Turkish hostage.

Meantime, a Somali man could be heading home soon. The Arabic language network Al-Jazeera says his captors decided to free the man after his Kuwaiti employer agreed to leave Iraq.

In Louisiana, the trial of Derrick Todd Lee starts this morning. Police say he's the serial killer who terrorized women from April 1998 until March 2003. In the trial that begins today, he is charged with the killing of LSU student Geralyn Desoto (ph). Lee is suspected of killing seven women in all. His DNA was found at the scene of several of those murders.

Human error is being blamed for the grounding of dozens of American Airlines and U.S. Airways flights nationwide on Sunday morning. A computer system that clears aircraft for takeoff failed. American had its planes back up after two hours, while U.S. Airways flights were grounded for about three hours.

The fright flick "The Village" scared crowds of moviegoers into theaters over the weekend. The story of a rural community menaced by monster in the woods pulled in nearly $51 million. Matt Damon's spy thriller, "The Bourne Supremacy," held second place.

Haven't seen either. So can't comment about that.

COLLINS: Yes. I've heard mixed reviews, but I know "The Village" one was supposed to be creepy scary. So I'm holding off on that.

WALLACE: OK.

COLLINS: All right. Kelly, thanks so much.

WALLACE: Sure.

COLLINS: Want to get another check of the weather now, which is also a little scary. Chad Myers at the CNN Center with the latest on Tropical Storm Alex, yes? Still tropical storm?

(WEATHER REPORT)

HEMMER: We are inside the Grand Rapids Fire Department. In a matter of minutes here, we do expect John Kerry, the senator who wants to be the 44th president of the United States, to be my guest. We'll talk to him about the latest terror warnings, his reaction. He has been briefed. We'll talk to him as our coverage continues live on AMERICAN MORNING here in Grand Rapids right after this.

(COMMERCIAL BREAK)

COLLINS: Welcome back.

CAFFERTY: Welcome back, indeed.

The "Question of the Day" has to do with who will keep the country safer, President Bush or John Kerry. The question being asked in light of the terrorist warnings that came out yesterday and the extra security being implemented around places like New York City, Washington, and Newark, New Jersey, this morning.

We've gotten a ton of mail. Kind of, you know, a little of this, a little of that.

Kathryn in Middletown, Connecticut, "I think we're safer with President Bush. The one thing that's come out of the past three years is that when George Bush says he's going to do something, he does it. He gave both the Taliban and Saddam Hussein a deadline, and when it passed, he took action. I think this decisiveness makes us safer."

Diane in Atlanta writes, "Bush and Kerry would both fight the war on terror with equal vigilance. Kerry could easily be more effective by rebuilding relationships with traditional allies and addressing the long-term solutions."

Jim in Cambridge, New York, "After the Democratic National Convention, we now know that a Kerry speech has the ability to rouse a partisan crowd to a state of semi consciousness, and Bush is able to put small children to sleep during a national crisis by reading to them. I think the answer was on '90-Second Pop,' Victoria Gotti is the one to lead us to safety in the war on terror."

Which brings us now to the business news. The future suggesting Wall Street may go south. They don't like this uncertainty when terror warnings are on the rise. Andy Serwer is here "Minding Your Business."

The markets are open. What have we got?

SERWER: Well, probably not as bad as many people might have imagined this morning, Jack. Let's take a look at the Big Board here.

Right away, you can see we're down 24 points, which really ain't a whole lot of anything. I mean, the market can be down 24 points on any given day, obviously.

CAFFERTY: Sure.

SERWER: Citigroup is trading down. That's one of the companies apparently targeted by terrorists, down about 50 cents to $43.

Another stock we're watching this morning, unrelated to terrorists, Apple, it's down 83 cents to $31. CEO Steve Jobs reporting that he has had surgery for a non-lethal form of pancreatic cancer and is recovering. But let's talk a little bit more about Wall Street this morning, Jack. CAFFERTY: I see we had Senator Schumer down there having a little meeting with the press.

SERWER: That's right. We had Mayor Bloomberg, Governor Pataki was down there as well, as well as John Thain, who is the chief executive of the New York Stock Exchange. John Thain and Senator Schumer outside of the New York Stock Exchange. Here's what Senator Schumer had to say.

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D), NEW YORK: If every time they made a threat we stopped doing what we're doing, they'd win. And so we feel it's almost a moral imperative for everybody to go about their jobs. There may be a few butterflies in some stomachs, but you still go forward, you still move forward and do what you have to do.

(END VIDEO CLIP)

SERWER: You know, after 9/11, Jack, obviously a lot of people on Wall Street were very depressed. People had dozens of colleagues who were killed in that tragedy.

This kind of a day brings that all back to them. But I think, if anything, over the past few years, Wall Street and the people who work there have learned to be very resilient. And I think, if anything, they're going to work this morning, you know, understanding the threat and knowing that they have a job to do.

CAFFERTY: Well, and I was watching some of the coverage last night at home on the security that was put in place around the Wall Street and around the stock exchange and some of those buildings downtown. It doesn't get any better than what the New York City Police Department and the people specially trained in fighting terrorism in this city are capable to bring to bear. They've got to be nuts to try anything down there.

SERWER: Yes, I think you're right. I mean, that is a very hard target now. I mean, it's sort of tantamount almost to a military base. A very hard place for someone to get into.

CAFFERTY: Yes. Thanks, Andy.

SERWER: You're welcome.

COLLINS: We are going to talk with Governor Pataki a little bit later on this morning as well. For now, though, we are going to turn things back over to Bill Hemmer, standing by in Grand Rapids once again.

Hi, Bill.

HEMMER: Hey, Heidi.

Awful lot to consider based on what you guys are talking about back there in New York. And certainly there are implications not just in the Northeast, but truly for all Americans across this country.

If you listened to the latest "Newsweek" poll, terrorism was again the number one concern. We'll talk about that very issue with Senator John Kerry in a matter of minutes here live in Grand Rapids as our coverage continues in a moment.

(COMMERCIAL BREAK)

COLLINS: Workers in Washington returned to the World Bank and IMF buildings today knowing they could be walking into danger. As Sean Callebs reports, the tensions are as high as the security.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): A sure sign tighter security has come to the World Bank and IMF buildings in downtown Washington. The World Bank says police cars won't be a constant here. In a glass and steel building along a busy street, excuse employees who work here if they feel somewhat vulnerable.

UNIDENTIFIED MALE: Well, I think anyone feels vulnerable when they hear that there is an increased threat level that affects them here, no matter if they work in Congress or the White House or our institution here at the IMF.

CALLEBS: The World Bank spokesman says he can't talk about specific security changes. There are 7,000 World Bank employees scattered around D.C. Several thousand work here.

UNIDENTIFIED MALE: We want the staff to feel reassured that we are taking the utmost steps to ensure their safety while they're here at the bank.

UNIDENTIFIED FEMALE: This is the nation's capital. And it needs to be safe somewhere. And it must be here.

CALLEBS: Indeed, that is the attitude city leaders wanted citizens to embrace. Threat levels go up and go down. They say it will take more than a threat on financial centers to rattle people in the nation's capital.

MAYOR ANTHONY WILLIAMS (D), DISTRICT OF COLUMBIA: If you're going to shop, entertain friends, whatever you're going to do, continue to do that, because what we're protecting here is our way of life, and we want that way of life to continue, because that is indeed our strength.

CALLEBS: Along with the World Bank and IMF, D.C. police say the Federal Reserve, Bureau of Engraving and other financial buildings will get more attention from officers.

UNIDENTIFIED MALE: They want basically to affect everybody's life, to scare the people. But we are not. We are cautious, but not scared.

CALLEBS (on camera): Officials and financial executives are hoping for business as usual and know they will be able to better gauge reaction once rush hour kicks in, the streets are jammed ,and residents have had a night to sleep on the threats.

Sean Callebs, CNN, Washington.

(END VIDEOTAPE)

COLLINS: The IMF and World Bank headquarters are about two blocks from the White House, as you may know if you are familiar with that area.

All right. You guys have been there. You know what it's like. It is pretty close. People are obviously very -- and honestly nervous about this now.

CAFFERTY: They're nervous about it. But you know what? I'm encouraged.

And the thing that kind of encourages me is to see the response the country is capable of when they get some "credible intelligence," sometime in the last 72 hours or so, reportedly from this Pakistani-al Qaeda fellow that they...

COLLINS: Two of them, yes.

CAFFERTY: ... that they nabbed over there. And, I mean, within hours, they not only are able to alert the country, but they're able to put in place security that looks to me, at least, as -- and I'm no expert -- to be almost impenetrable. I mean, if I'm any kind of a suicide or car bomber, the last place I'm going to try to get to is the World Bank building or the stock exchange...

COLLINS: Certainly now, right.

CAFFERTY: ... or the building in Newark. I mean, we -- we responded, responded quickly, told the public here's what's going on. I mean, that's a far sight from where we were two or three years ago.

COLLINS: That's for sure. It is impressive indeed. All right, Jack. Thanks for that.

And Bill standing by in Grand Rapids once again. Senator Kerry, yes, Bill?

HEMMER: Heidi, thank you. And good morning. And welcome back, everyone, to our special coverage here as campaign 2004 rolls on, just about 94 days before the Americans go to the polls on the 2nd of November to select the 44th president.

Possibly will that be John Kerry, or will they reelect George Bush to a second term? Let's talk to one of the men in focus today. Senator John Kerry my guest here in Grand Rapids.

Good morning to you.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Good morning, Bill. How are you?

HEMMER: I really appreciate -- I'm doing just fine. Thank you.

KERRY: Glad to be here.

HEMMER: I know you've been briefed by the Homeland Security Department regarding the latest terror threat. How serious, in your estimation, is it?

KERRY: Well, they take any threat seriously. What's important, however, is -- is not to sort of bounce along from threat to threat. It's to win the war. And I believe that I can fight a more effective war on terror than George Bush is. I know I can fight a more effective war.

Lee Hamilton, the co-chairman of the 9/11 Commission, has said this administration is not moving with the urgency necessary to respond to our needs. I believe this administration and its policies is actually encouraging the recruitment of terrorists.

We haven't done the work necessary to reach out to other countries. We haven't done the work necessary with the Muslim world. We haven't done the work necessary to protect our own ports, our chemical facilities, our nuclear facilities. There is a long, long list in the 9/11 recommendations that are undone.

This administration fought against the 9/11 Commission, and they haven't even moved rapidly to implement it. I think that we can do better. And that's what I intend to do.

HEMMER: Back to the current day threat...

KERRY: Sure.

HEMMER: ... in the city of New York today, you have traffic in the Lincoln Tunnel shut down, in the Holland tunnel shut down, on the Williamsburg Bridge shut down, all traffic coming in commercially.

KERRY: Sure.

HEMMER: What did the Homeland Security Department tell you specifically about...

(CROSSTALK)

KERRY: Well, I can't tell you what they told me, obviously. It's a secure briefing and a classified briefing. I'm not free to tell you that.

I'm just telling you that you take any threat seriously. The issue is -- I mean, we all have known there are going to be threats. This administration said two years ago it is not a question of "if". It is a question of "when."

Now, if that's true, and they meant what they said, we Americans have a right to ask, well, then, why haven't you moved more rapidly to do the things necessary to make America as safe as possible? We shouldn't be limping along from one piece of information to the next. We should be doing everything necessary to protect our country.

I will do that. I know what to do. I called a year ago or so for the creation of a national director for intelligence. Finally, this administration is getting around to thinking of doing it. We called for a Homeland Security Department a year and a half before they put it together. Finally, they got around to putting it together.

We don't need leadership that kind of drags its feet and finally gets there. We need leadership that leads, that knows how to fight an effective war on terror. I can do a better job.

HEMMER: Yesterday, here on CNN, Governor Howard Dean suggested that there may be an element of politics in this announcement.

KERRY: Well, I haven't suggested -- I don't care what he said. I haven't suggested that, and I won't suggest that.

HEMMER: Are you dismissing yourself or even distancing yourself from Howard Dean at this point?

KERRY: It's not a question of distancing. People have their opinions, other people are entitled to them. I do not hold that opinion. I do not believe that.

KERRY: He held the question, is it politics or is it real, or is it both?

KERRY: Well, he asked the question. It's not my question. I believe you take these threats seriously. I take them seriously.

I think people of good conscience are working on these issues. I respect the men and women in the threat reduction effort. I respect the people who are in the Homeland Security Department.

I don't question them. I question the leadership. I question why it is that we are struggling to get Arab countries and European countries who have a stake in the outcome of the war on terror to be part of it. It's a failure of statesmanship and leadership. And I intend to do better.

HEMMER: In Boston, Howard Dean told us he speaks to you by telephone about every two weeks.

KERRY: Somewhere in that vicinity.

HEMMER: And he said the conversations aren't short, they're actually pretty long in discussion.

KERRY: We've had some good conversations.

HEMMER: And he's a surrogate for your campaign.

KERRY: Yes, he is. HEMMER: Based on his comments yesterday...

KERRY: I disagree with his comment yesterday. It's very simple.

HEMMER: Will he stay on your campaign?

KERRY: Absolutely. He's done a very, very good job. He has his opinions. I respect those opinions. But I happen to differ with him on this one.

HEMMER: Let's talk about the polling numbers. The CNN-"USA Today"-Gallup poll came out reflecting on Boston again, on the screen for our viewers. Registered voters give you a slight lead. In a two- man race with George Bush, 50 to 47 percent. Likely voters, though, show you actually trailing 50 to 47 percentage...

KERRY: Yes, but none of that means anything right now, Bill.

HEMMER: It doesn't mean anything?

KERRY: No, it doesn't mean anything. First of all, it doesn't mean anything because you don't know who the likely voters are.

We're registering people. There are countless numbers of new people who are going to come into the system. All of these polls I think are so wacky, because frankly, they don't know what the political dynamic is this year. That's number one.

Number two, I don't pay attention to polls. If I paid attention to polls, I would have stopped getting up in the morning last December. I mean, I -- polls are meaningless to me.

What matters to me are the people in Grand Rapids and the people in Michigan, and the people in Ohio that I've been talking to who want health care. They want jobs. They don't want to see their jobs going overseas and be replaced by a job that pays $9,000 less.

We can do a better job of moving our economy. And just today, I've put out a book. John Edwards and I put out a book today saying our plan for America. It's a positive vision of how we can put people back to work.

I have a plan for health care for all Americans. The other side has had four years to come up with a plan for health care. They don't have a plan. I have a plan to provide health care to all Americans, and I show how we're going to pay for it.

What people want to know is, how are you going to make my life better, what are you going to do to help us, and to have a government that's as good as the hopes of the American people? I believe we're going to do that.

HEMMER: Back to the question of polling, though, your own campaign...

KERRY: Boy, you're incessant, aren't you? You won't quit on this polling thing.

HEMMER: Well, HEMMER: not too -- just a follow-up. That's fair. You spent thousands of dollars trying to figure out which way the wind is blowing in this country.

KERRY: No, wrong. Wrong. Wrong. Wrong.

You go back and look at Tim Russert's interview with me. When I announced the formation of a committee to start to run for president over two years ago, what did I say? I said the issue is security. The security of our nation, job security, wage security, income security, health security, education. And every one of those issues are the issues I have consistently run on.

The plans I laid out a year and a half ago are the plans I'm talking about today. There's nothing that's shifting in what I'm proposing.

I laid out on the Senate floor, when we voted about Saddam Hussein, exactly how you wage a war on terror effectively. The president chose not to do the things I suggested. And now we're spending billions of dollars.

We've lost too many lives because he rushed to war without a plan to win the peace. I can fight a more effective war on terror, and I'm going to get our troops home faster and more effectively than George Bush is.

HEMMER: Over the weekend, George Bush was out on the campaign trail himself, hitting many of the same stops you are, in places like...

KERRY: Yes, they're sort of following us around. It's kind of interesting.

HEMMER: I think at one point, what, you came within 20 miles of one another. He never refers to you by name. He just says "my opponent." How do you refer to him?

KERRY: The president. He's the president. I respect the fact that he's the president. But I don't refer to him.

I rarely -- I talk occasionally about his plan or no plan. But I talk about our plans. I've got too much that I want to talk about that's positive for America. I don't need to talk about George Bush.

I want to talk about how we're going to have health care for every single American. We have a plan. And under my plan, we roll back -- here's how I mention George Bush -- we roll back George Bush's tax cut for the wealthiest Americans, and we invest the money in health care and education.

I use that money to help our kids to be able to have after-school programs and to be able to have the ability to go to college. A lot of kids are having trouble with college loans today. I'm going to raise those loans. And we're going to give a $4,000 tuition tax credit to parents to empower them to be able to pay the tuitions. This is a positive vision, Bill. And I don't need to spend my time on George Bush.

HEMMER: We are almost out of time.

KERRY: There, I mentioned his name again.

HEMMER: Yes, you did, twice, I think. You went two for two in a softball game rumor has it. It was yesterday?

KERRY: I went two for tow in a couple innings. Yes, we had fun.

HEMMER: Are you having fun on this campaign?

KERRY: I'm having a ball. When I get to play softball, I'm having a ball.

HEMMER: You will be 61 in December. Everyone knows you snowboard in Idaho and you -- and you...

KERRY: Well, I feel like I'm 35. I feel terrific. I feel -- you know, what you can do and how you feel is in your head. And if you -- if you, you know, sort of have fun with life, and I do, you just keep going out until your body tells you don't do it.

HEMMER: We appreciate your time. You have two stops in Grand Rapids, then it's on to Wisconsin I believe. Is that right on that?

KERRY: Yes, sir. I think. No, I know.

HEMMER: Thank you for your time.

KERRY: Thanks a lot.

HEMMER: We'll see you down the road.

KERRY: Yes, sir.

HEMMER: That does it for this coverage here on this special edition of AMERICAN MORNING live in Grand Rapids, Michigan. Our coverage continues throughout the campaign, along the Election Express, the bus that will take us from coast to coast as we lead up to the big day on the 2nd of November.

I'm Bill Hemmer live in Grand Rapids. Are coverage continues in a moment here now with Daryn Kagan at the CNN Center in Atlanta.

Daryn, good morning there.

DARYN KAGAN, CNN ANCHOR: Bill, good morning to you. Safe travels back to New York City. We'll get started here in Atlanta.

HEMMER: Thank you.

KAGAN: Good morning. We're at CNN headquarters in Atlanta. I'm Daryn Kagan.

There are new terror alerts in New York, Washington and New Jersey today. And a senior intelligence source tells CNN arrests in Pakistan may be the reason.

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