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Dow Nears Record Close; New Threats from North Korea; Media Outlets Spar over Menendez Story; Martha Stewart Vs. Macy's; Justin Verlander: One-on-One
Aired March 05, 2013 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRIS JOHN FARLEY, EDITOR SPEAKEASY: I'm from New Rochelle. I always turn sports events into metaphors. But I moved there because I love the public schools. I have a commitment to public schools. Our kids go to public schools there. It was great to see on your show win in the last second shot. See the guy who made the shot seems like a nice young guy. I hope he has success in life.
SOLEDAD O'BRIEN, CNN ANCHOR: Me, too.
FARLEY: And I hope it encouraging other people to get excited about schools in New Rochelle. So I love seeing that.
O'BRIEN: We second that. And we hope it goes on to great education as well.
ROLAND MARTIN, CNN CONTRIBUTOR: Absolutely.
O'BRIEN: Thanks guys. Appreciate it. Great to have you today, Daryl. Thanks for being with us. We've got to leave it here. "CNN NEWSROOM" with Christi Paul begins right now. we'll see everybody back here See you tomorrow morning. Hey, Christi.
CHRISTI PAUL, CNN ANCHOR: Happening now in the NEWSROOM. Sex, lies and videotape.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: He called her very beautiful. And they slept together.
(END VIDEO CLIP)
PAUL: The explosive money for sex allegations against Senator Menendez.
(BEGIN VIDEO CLIP)
SEN. BOB MENENDEZ (D), NEW JERSEY: The bottom line is all of those smears are absolutely false.
(END VIDEO CLIP)
PAUL: Breaking new details coming out. Was the whole thing made up?
Also, drones over JFK.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: What did you say?
UNIDENTIFIED MALE: We saw a drone, a drone aircraft.
(END VIDEO CLIP)
PAUL: Alarming claims by a pilot this morning. The drone dangerously close to the airport. The FAA now investigating.
Plus, NASCAR. And the NRA. A marriage on the track. A first in the top series.
And Carol on the road in Florida for spring training. One on one with Justin Verlander.
(BEGIN VIDEO CLIP)
CAROL COSTELLO, CNN ANCHOR: Do you think that we'll see a day soon when a player will be comfortable enough to come out as a gay baseball player?
(END VIDEO CLIP)
PAUL: It's game time. You're live in the CNN NEWSROOM.
Good morning. Happy Tuesday to you. I hope the day has been good to you so far. I'm Christi Paul in today for Carol Costello. We begin with your money.
All right. This hour on Wall Street the Dow opens within striking distance of a new milestone. The closing bell ended yesterday's trading less than 40 points from an all-time high. That record was set in October 2007 when the nation's economy was hitting the skids.
Alison Kosik is at the New York Stock Exchange.
So, Alison, a good day to look at your 401(k) if you want to get to be in a better mood. What are futures looking like?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It very well could be that day, and that data as the Dow finally hits that record that we've been watching for weeks now. And if futures are any indication, not only will the Dow hit it at the opening bell, it will blow right through it.
I want to show you the number we are watching for. The Dow right now is sitting at 14127. When that bell rings, the number we're going to be looking for, for the Dow to hit 14164. Just remember, if stocks hit it, it doesn't mean it can stay there. Anything can happen during the day. What's really going to be key, Christi, is if it sticks. If it closes at that record high of 14164.
You know, all this really begs the question, because you look at how the major indices are doing. Just this year they're up anywhere from 7 to 8 percent. I'm talking not just about the Dow but the S&P 500. The NASDAQ as well. And many are asking, is this justified? Because you look at the last three months of last year. GDP, economic growth in this country pretty much stalled out.
And who can forget those spending cuts. Yes, they went into effect late Friday. And the big worry there is that there could be a one-two punch to the economy. Not just the economic growth, Christi, but the jobs market as well which also is having trouble really gaining momentum these days.
PAUL: Yes. We wonder. We're so close to that number but how long will it last, is the question.
KOSIK: Exactly.
PAUL: Alison, thank you so much. We appreciate it.
Now I want to let you know Washington this morning is watching a new threat from North Korea. The government reportedly threatening to dissolve a truce with South Korea that ended the 1950-1953 civil war between the two countries.
Here's what we know. South Korean media says the move is in response to U.S.-led efforts to impose new sanctions over North Korea's recent nuclear test. The U.N. Security Council is expected to meet today, by the way, to consider a proposal authorizing those sanctions.
Joining me now with more from Beijing is CNN International's David MacKenzie.
David, what have you learned?
DAVID MACKENZIE, CNN INTERNATIONAL CORRESPONDENT: What we've learned is certainly the side of North Korea, South Korea, a troubling sign of increasing tensions on the Korean Peninsula. As you say, North Korea is making those saber rattling calls towards the south. The two sides have been technically at war obviously for many decades.
On the other side, in the U.N. and the U.S., talk of -- talks about pushing sanctions against North Korea. Obviously that third nuclear test happened recently in North Korea. Very worrying to both the U.S. and China and its allies. Talk now potentially, I just must say potentially, of a deal between the U.S. and China of some kind of push of sanctions against North Korea.
This is not confirmed in that the sanctions vote hasn't yet happened. But they might be able to push some new tough calls against the North Korean leadership which has just ignored all calls to end its nuclear program in recent years -- Christi.
PAUL: All right. And thank you so much. We appreciate it.
I want to talk about this high ranking politician. You probably heard a little bit about this. Caught up in scandal. After he's accused of sex with prostitutes. And now one of those women says, oh, no. I made it all up.
I'm talking about Senator Robert Menendez of New Jersey. The target of e-mails accusing him of partying with hookers in the Dominican Republic. Now Menendez strongly denied those claims to CNN and slammed his unidentified accusers.
(BEGIN VIDEO CLIP)
MENENDEZ: It's amazing to me that anonymous, nameless, faceless individuals on a Web site can drive that type of story into the mainstream. But that's what they've done successfully. Now nobody can find them. No one ever met them. No one ever talked to them. But that's where we're at. So the bottom line is all of those smears are absolutely false. And, you know, that's the bottom line.
(END VIDEO CLIP)
PAUL: CNN's Drew Griffin went to the Dominican Republic to try to track down the source. A tipster who called himself Peter Williams. In the end, though, found nothing.
(BEGIN VIDEO CLIP)
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: A rundown brothel in Santo Domingo is hardly the place for serious journalism, and yet here we are, knocking on its door. And finding yet another mysterious clue leading to another closed door.
(On camera): I can tell you from my sources in the Dominican Republic now that they still are not very close to finding out who is the, quote-unquote, "mastermind. " Who is Peter Williams?
(END VIDEO CLIP)
PAUL: OK. And here's the thing. One of the women allegedly shown here in this video that originally aired on the conservative Web site "The Daily Caller" says a local attorney paid her to accuse the senator.
"The Daily Caller" is standing by that video. And its report. Saying "The Washington Post" and others identified the wrong prostitute.
Joining me now is Adriana Houser, a correspondent for CNN in Espanol.
Adriana, thank you so much for being with us. So what have -- what have you been able to discern from this whole chaotic scene?
ADRIANA HOUSER, CNN ESPANOL CORRESPONDENT: Good morning, Christi. Well, "The Washington Post" seems to base its article and affidavit similar to the ones we have. And we obtain those through a Dominican attorney. His name is Benicio Castillo. And this happened during a press conference in the DR. Castillo is an acquaintance of Senator Menendez and a cousin of Dr. Salomon Melgen, a friend of Menendez and political contributor.
In those documents a woman identified as Nexus Delos Santos Santana says she is the girl in the video. That she was paid to read a script saying that she slept with Menendez. But that she never actually met Menendez, Melgen or Castillo. Santana asks that she never knew she was being recorded.
Castillo assures Santana is the girl who appears in one of the videos wearing a yellow dress. He also presented another notarized confession, Christi, from an attorney called Miguel Galvan who pins the blame on a third attorney. Galvan says that this attorney asked him for help with a divorce case by finding him witnesses who would make prostitution claims.
CNN has tried to contact both attorneys. But we have not gotten a response yet. This is the latest turn in Senator Menendez's ordeal. He has repeatedly denied all accusations. And not those -- and not just those that include prostitutes, but also improper use of his office to help some of Melgen's businesses -- Christi.
PAUL: And I think some unidentified flights, perhaps, is in that as well. I want to get back to -- as I understand it, if you can clarify this for us, there was another document where the prostitute actually asked for legal protection? Is that right?
HAUSER: That's right. There is a third document that Benicio Castillo presented. And that document showed that Santana and Galvan filed for legal protection arguing that they were tricked. That their actions were based on lies and that they were tricked. And that court hearing will take place later today in the D.R. We'll be covering and we'll see if the court decides to grant or deny that request -- Christi.
PAUL: Adriana, thank you so much. Good to get your perspective. We appreciate it.
I'm going to get you some other top stories this morning. Have you heard about the FAA investigating this report from an Italian airline pilot who says he came dangerously close to a drone aircraft while he was landing at JFK? Now we're going to let you hear the pilot's conversation with air traffic controllers right now. This is from the Web site liveatc.net.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: What did you see?
UNIDENTIFIED MALE: We saw a drone, a drone aircraft.
UNIDENTIFIED MALE: Roger, what altitude did you see that aircraft?
UNIDENTIFIED MALE: About 1,500.
UNIDENTIFIED MALE: Roger.
UNIDENTIFIED MALE: Caution, a report of a drone on about a five-mile final by the traffic that you're following.
(END VIDEO CLIP) PAUL: So drones are becoming more popular, as you know. Not only among government agencies but even hobbyists. You know, folks who are doing it for recreation. Because of that the FAA has been scrambling to set up new rules and tighten existing restrictions near airports. Because, you know, god forbid, if there's a mid-air collision or any of those drones get sucked into -- into the engine of another commercial plane.
Online trackers have another great white shark to keep up with today. And her name is Lydia. Researchers off Jacksonville, Florida, captured and tagged their third great white Sunday. Take a look at this. Lydia's almost 15 feet long, weighs nearly 2,000 pounds. She's the first great white to be captured. Satellite tagged. And then released in an area south of Cape Cod, Massachusetts.
And we're learning this morning Venezuela reporting the health of its president is failing. Hugo Chavez has been battling cancer, as you know, for months. The government says he now is facing a severe new infection as well as trouble breathing.
What you're looking at here is the last public image of Chavez that was released last month. Those are his two daughters with him in the photo.
Just a heads up for you, too, if you live in the eastern United States. Take a look. This storm has its eyes set on you, I'm sorry to say. In North Dakota this morning motorists are being told, look, just stay off the roads altogether. High winds are creating, as you can see, whiteout conditions. In Colorado. Accidents littered roads and highways. Blizzard conditions blamed for a 30-car pileup near Vail.
This morning we do know Interstate 70 is once again open in both directions, though. This morning, though, rough sledding in Minneapolis. This is the morning commute for a lot of folks there. Some areas have seen seven inches of snow and they're still counting it.
And millions more Americans waiting for the storm's arrival. CNN Meteorologist Jennifer Delgado, in fact, has that story.
(BEGIN VIDEOTAPE)
JENNIFER DELGADO, AMS METEOROLOGIST (voice-over): Here we go again.
UNIDENTIFIED MALE: Last week was practice. This is the real deal.
DELGADO: Another winter storm is gearing up and dumping tons of snow from the Dakotas to the East Coast.
This is North Dakota. A foot of snow fell on parts of that state. The roads there?
UNIDENTIFIED MALE: They're a little icy. You can't tell, but they're icy. DELGADO: Minnesota is seeing round two of a one-two punch. Some areas there could also get a foot of snow. It's already caused plenty of wrecks. Just look at this. You can follow the tracks from the road all the way down to where the car ended up overturned.
Air travelers are caught in the middle of it. Hundreds of flights have already been canceled for today. This man had the right idea when he left last night.
JIM COURTNEY, AIRLINES PASSENGER: Getting out ahead of the weather. We're going to fly out to San Diego and beat the snow.
DELGADO: It's been a relatively mild winter so far in Chicago. But that will change today.
(END VIDEOTAPE)
DELGADO: And hi, Christi. Well, I can tell you now the snow is finally starting to come down in Chicago. And it's light right now. But as we go throughout the wait, morning as well as into the afternoon, this snow is going to be changing over to the heavier stuff.
We're talking six to eight inches across the region. We potentially could see even 10 inches in some locations. Now if you look, we're on the magnificent mile. You see the cars out there. They're moving smoothly. Wet roadways. But certainly as we get closer to the evening commute we're going to see of those gusty winds up to about 30 miles per hour.
That is going to lead to travel delays for motorists as they're coming home from work and, of course, flying out of O'Hare, midway, Christi. You know how that nightmare can be waiting around there.
PAUL: Yes, That's not going to be fun for those folks. The good thing about Chicago is everybody there is used to it. They know how to handle it. So kudos to them.
(LAUGHTER)
DELGADO: They are. They're pros. They're pros.
PAUL: Yes. Hey, Jennifer --
DELGADO: They're pros. Salt is on the ground and they're ready for this.
PAUL: Absolutely right. Thank you so much for the report. Good to see you.
DELGADO: You're welcome.
PAUL: Still to come here from the showroom to the courtroom. Macy's takes on JC Penney. And Martha Stewart is right in the middle of the whole thing.
(COMMERCIAL BREAK)
PAUL: It is Martha versus Macy's, and we are waiting for her to arrive at court any moment now, we're told she could come in. The queen of home furnishings is taking the stand today as Macy's fights rivals J.C. Penney for multimillion dollar rights to a Martha Stewart housewares line.
Here's Christine Romans.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): It's been eight years since Martha Stewart left prison, serving five months for lying about a stock sale.
Goodbye, rap sheet. Hello, cotton sheets. A deal with Macy's helped her company rebuild.
PAMELA DANZINGER, PRESIDENT, UNITY MARKETING: Macy's was really important in giving her a leg up. And, you know, giving her a helping hand.
MICHAEL KUPINSKI, DIR. OF RESEARCH, NOBLE FINANCIAL CAPITAL MARKETS: Macy's obviously recognized the brand and the value of the brand, the quality of the merchandise.
ROMANS: Now Stewart is back in court. Macy's is suing her company over a deal with J.C. Penney.
Her defense? A contract loophole. Quote, "The Macy's contract is written to allow Martha Stewart Living Omnimedia to sell a broad range of products at J.C. Penney with no restrictions whatsoever in a store inside J.C. Penney."
But brand experts say the suit is trouble.
DANZINGER: She was married to Macy's. But she went of and had an affair -- I mean, and got in bed with a direct competitor, with J.C. Penney's. I think it just shows really bad form.
ROMANS: Stewart's company is struggling, losing $56 million in 2012. It shuttered magazines and laid off workers. The shares are beaten down.
And last year, the Hallmark Channel canceled "The Martha Stewart Show". These aren't exactly salad days for the doyen of domesticity. But neither was the insider trading case.
MARTHA STEWART, BUSINESS MAGNATE: I want to focus on my salad.
ROMANS: Now, she wants to focus on retail. Twenty-nine percent of her company's revenues came from merchandise last year. You can find her wares at Home Depot, PetSmart, even Staples, and if she prevails, J.C. Penney. KUPINSKI: I suspect the court is going to allow J.C. Penney a certain number of products that are going to go into their stores, whether they're branded by Martha Stewart or not branded by Martha Stewart.
ROMANS: But at what cost?
STEWART: Talk to the customers.
DANZINGER: I don't think anybody, any other business is going to want to get involved with her in the future. I think she's really hurt her brand and hurt herself.
ROMANS: Very messy business dealings for the woman who peddles perfection.
(END VIDEOTAPE)
ROMANS: So we've heard, Christi, from the CEO of J.C. Penney and the CEO of Macy's. Today, it's Martha Stewart's turn. We're expecting her any moment. Press gathered behind me.
It's been nine years since her trial. A lot of familiar faces back there saying it's as cold today as it was the last time they were waiting for Martha to come to court, although a very different deal, of course.
A civil case is sitting in front of a judge. The judge has already told them, I wish you guys would have settled this. They didn't.
So, now, we're here. It's Martha's turn to testify today about that contract dispute between very old household names -- Christi.
PAUL: Why do you think, Christine, it is that they couldn't settle it and it had to go to court?
ROMANS: You know, there are high stakes for everyone involved here. Very high stakes for J.C. Penney which wants to put a Martha Stewart store within a store. J.C. Penney has had a very difficult time with the new turnaround strategy from a new CEO. Very high stakes for J.C. Penney.
Very high stakes for Macy's. The CEO of Macy's says we have 8 percent revenue growth of the Martha Stewart branded products in our store. We want to be the only big department store selling Martha Stewart brands.
And for Martha Stewart, too, as I said in the piece. I mean, she's been shuttering magazines. Her cable channel -- her Hallmark Channel show has been canceled.
All three parties have very high stakes here. You know, on the surface, it's a contract dispute. But a contract dispute that means a lot financially for all three involved.
PAUL: But, you know, Martha Stewart, some people look at this and say, gosh, Martha Stewart is everywhere. She has so much. Why would she need J.C. Penney when she's got such a lock-in on Macy's?
ROMANS: It's so interesting, too, because, you know, Martha Stewart's brand -- I mean, is ubiquitous, right?
PAUL: Yes.
ROMANS: What kind of products does she want to be selling, specifically in J.C. Penney.
Well, Macy's says, look, bath and cookware, bedding, that's our purview.
Martha Stewart's people are saying, no, look, we have a clause in the contract, in case, Martha wanted to start her own store, there's a clause in the contract so Martha could start her own store.
The question is, is Martha Stewart opening a store inside J.C. Penney any different than J.C. Penney just selling Martha Stewart goods? That's what this judge is going to have to decide. Again, she's testifying here any moment. She'll be here to testify.
PAUL: Isn't that interesting.
All right. Hey, Christine, thank you so much for breaking it down for us. Good to see you today.
ROMANS: You're welcome.
PAUL: Sure. And just ahead in THE NEWSROOM --
(BEGIN VIDEO CLIP)
CAROL COSTELLO, CNN CORRESPONDENT: Hotdogs, apple pie and Tiger Town.
Justin Verlander was humbled?
JUSTIN VERLANDER, DETROIT TIGERS: I wouldn't say I was humbled. I got a new respect.
COSTELLO: Justin Verlander.
You're live in the CNN NEWSROOM.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
PAUL: So reporters are asking Justin Verlander if he wants to be the sport's first $200 million pitcher. Who wouldn't want to be, right?
Well, of course. He's a five-time all star, won the MVP and Cy Young Award of the American League in 2011, and gearing up to pitch Detroit Tigers back into the World Series. But Verlander did take a little time from his spring training regimen to sit down with our own Carol Costello for, let's call it a wide ranging interview. Take a look.
(BEGIN VIDEOTAPE)
COSTELLO: I'm here in Tiger Town, spring home of the Detroit Tigers. I got a chance to sit down with Justin Verlander to talk salary, golf and gay rights.
So, I guess I'll start by asking about your golf game.
VERLANDER: I play a lot. You know, I used to think I was pretty good. Then I went out recently and played in the AT&T Pro-Am at Pebble Beach. Got a new respect for how good those tour players really are.
COSTELLO: Justin Verlander was humbled?
VERLANDER: I wouldn't say I was humbled. I got a new respect.
(LAUGHTER)
COSTELLO: So, $200 million, you would be, like, the first pitcher to ever be a $200 million pitcher. I guess at one point you said, yes, that would be great.
VERLANDER: Yes, of course, it would. I mean, what kind of question is that? Things got taken out of context a little bit. You know, I'm not going to take back what I said at all.
Do you want to be the first $200 million pitcher? Yes. Absolutely. You know?
Whether that will remain to be seen, I don't know. You know, I'm not worried about that. I'm worried about getting myself ready for the 2013 season.
I think somebody did an interview with Zack Greinke. He admitted he would go with the most money. Doesn't matter what the team was.
Do you feel that way? Does it matter?
VERLANDER: No, I don't quite feel that way. However, you take a lot of things into consideration when you start talking about extensions and that type of thing. You know, we're at this place that as baseball players, we're very fortunate to be in this place for a reason. That's because former players fought extremely hard and even risked their careers to allow us to have free agency and allow us to make a lot of money.
You know, I think you do a bit of a disservice to that if you don't -- if you don't honor what they did and use the system to your advantage.
COSTELLO: Yes. But $200 million, like, who needs that much?
VERLANDER: The team's bringing in a lot of money, too.
COSTELLO: I have to ask you about a gay player in major league baseball. A lot of talk about that in the NFL from this past season. Are there gay players in baseball already you think?
VERLANDER: I'm sure there are. You know, I think as with any sport, you know, a gay player would probably be hesitant to come out. You know, but, I mean, the sheer numbers say that there absolutely is. COSTELLO: Do you think that we'll see a day soon when a player will be comfortable enough to come out as a gay baseball player?
VERLANDER: Yes. I mean, I don't see why not. You know, I think given the right situation, you know, and a team, you know, that's -- you know, a family atmosphere. And I feel like we have that atmosphere here. I don't think one of our players would be scared to come out.
You know, we got 25 guys. It's a family. Our goal is to win the World Series. What your sexual orientation is, I don't see how that affects the ultimate goal of our family.
COSTELLO: Yes, why do you think there's so much controversy about it still, though?
VERLANDER: I think it's a tricky subject because you start getting into locker rooms and, you know, walking around nude or whatever. I think that would be more of a tricky subject than anything. You know, your life decisions and sexual orientation, like I said, I don't think that plays any effect into what we're trying to do as a team. So, I don't see why that would matter.
COSTELLO: So, you personally would embrace a gay player on the Detroit Tigers?
VERLANDER: Absolutely. I wouldn't mind it.
COSTELLO: So, what's your biggest goal this season like --
VERLANDER: Win a World Series.
COSTELLO: Of course. I guess I was thinking more develop a new pitch or get a hit.
(LAUGHTER)
VERLANDER: Thanks for that. You know, I've been saying for the last seven years that this is my year. So I'm going to go the other direction this year and say I'm not going to get a hit. Who cares? I don't care if I get a hit. I'm going to do everything I possibly can to jinx it the other way.
COSTELLO: Oh, I think that's a good idea.
VERLANDER: I do, too.
COSTELLO: So you just admit that --
VERLANDER: I suck.
COSTELLO: You suck. Yes!
VERLANDER: You might be the first person to ever hear me say that.
(LAUGHTER) COSTELLO: As for what's new in Justin Verlander's arsenal? He's not saying. It's a secret.
(END VIDEOTAPE)
PAUL: All righty.
Stories we're watching right now in the NEWSROOM:
You hear the bell. Record highs in sight as they open up things on Wall Street. Dow less than 40 points away from its all-time closing high that was set back on October 9th, 2007.
Queen Elizabeth was admitted Friday for some sort of gastrointestinal bug and she's expected to be released soon.>
