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White Knuckles on Wall Street; Gulf Oil Leak; Terror Probe Shifts to Pakistan; Stocks Set to Open Higher; Welcome to the Neonatal ICU Salon

Aired May 07, 2010 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR, "CNN NEWSROOM": And good morning, everybody. I'm Kyra Phillips. Keep your hands and feet inside the Dow. Take some Dramamine if today's ride is anything like Thursday. Believe me you are going to need it.

And a white-knuckled ride on Wall Street: a record sell-off not triggered by war or calamity or even gloomy forecasts.

This gut-wrenching freefall began as a simple technical glitch. Nearly 1,000 points lost in a half an hour. A late afternoon rally trimmed those losses but later this hour, the market opens more than 300 points lower than this time yesterday.

What exactly happened? And what does it mean for all of us today and beyond? Let's try and walk through it.

Poppy Harlow of CNNMoney.com joins me from New York now.

Poppy, what led to this dramatic selloff?

POPPY HARLOW, CNNMONEY.COM: Well, Kyra, let's just say it's another day, another market. And as you said 1,000 point loss on the Dow yesterday at point. A trillion dollars in wealth lost in recovery but still the worst fall we've seen for the Dow Industrials. Nearly 350 points yesterday. The worst in a year.

Today is a new day but traders on the floor behind me all tell me they're trying to figure out what happened. You mentioned a technical glitch. Let's clarify. There's no evidence yet that we have that there really was a technical glitch.

What it was technology getting ahead of man. As one of my colleagues said, it was man versus machine. That is what traders said. It was a market that was selling off. The concerns in Greece pushing that forward. And then it was technology, the computers that do most of the trades.

Only 30 percent of the trading volume is done here on the floor. Most of it is computers. And they move automatically, Kyra. That's what it seems happened but we do have the SEC and the Commodity Futures Trading Commission all looking into this.

But pull up with the NASDAQ said they basically said listen, this was not a system error. I want you to take a look at that. They're also going to take back some of the trades that were made between 2:40 and 3:00 p.m. yesterday trying to make up for some of those losses. The NASDAQ saying we had no technology or system issues.

We're going to keep a close eye on this, Kyra, throughout the day. Market, though, higher now but a half hour away from the open on Wall Street, Kyra.

PHILLIPS: Got it. All right, Poppy, we'll follow it throughout the day with you.

All right, so a painful day for some on Wall Street. We're going to see what today brings but frankly just another day of misery for those in Greece. The country that we love for its gorgeous white beaches, fabulous food, it's in serious crisis. Debt up to its neck. Now it's Germany to the rescue.

Fred Pleitgen is actually in Berlin now to try and explain how this all relates to us.

The German government is bailing Greece out. Let's talk about how it's going to help investors in New York today.

FREDERIK PLEITGEN, CNN CORRESPONDENT: Yes, Kyra. Just a couple of minutes ago the German government and its parliament actually signed off on the law that's going to help out Greece.

Now one of the things that investors in New York and of course in other places as well know now is that the biggest Eurozone country, the most wealthy Eurozone country are on board with this bailout.

Germany is going to pay some 1/5 of the bailout money that Greece needs. It's some $30 billion over the course of the next three years. So certainly that is something that European governments and others hope will calm down the international markets.

The big question, Kyra, that people here in Europe are asking right now is first of all, is this plan decisive enough and will it help enough to make sure that Greece really gets out of these troubles?

And certainly, there are some people here in Europe who are not sure whether or not even Germany and France, the biggest countries in the Eurozone are going to be able to shoulder this.

Now I want to give you just one little example of all of this. A week ago, Germany showed some reluctance to help Greece. And that is really something that set markets here in Europe on a tailspin and some believe hurt Greece even more.

So certainly the measures that were taken today by the German government, very important. And people really hope that they shore up some sort of trust among the markets, of course, especially on Wall Street -- Kyra.

PHILLIPS: Yes. Trust is the key word right now. Fred, thanks. And we just learned that the U.S. jobless rate bumped up a bit last month to 9.9 percent. About 290,000 jobs were added in April. That's the biggest monthly jump in four years.

So why did the jobless rate go up if more jobs were added? Quite simply, more unemployed Americans are feeling optimistic and are once again looking for work.

Now in a couple of hours, President Obama is due to make a statement on the new jobless numbers. That's scheduled at 11:00 Eastern, 8:00 Pacific. We will carry it live right here on CNN.

And we're all keeping our fingers crossed right now as the giant containment bell is being dropped in place in the Gulf of Mexico. The massive structure is supposed to help them control that oil leak. But it's never been tried at these depths before.

Meanwhile the oil from that leak is starting to wash up on shore. Louisiana's barrier islands getting coated right now. Residents in other spots are trying desperately to protect the coast.

And an investigation into what happened and who's to blame -- that's expected to start next week. And it looks like the Coast Guard may be taking the lead on that.

Let's get back to the containment dome. Homeland Security Secretary Janet Napolitano says she hopes it work. But they are proceeding as if it won't. Not quite a ringing endorsement for BP.

And there it goes. The massive concrete dome lowered into the water. That's just the first part of the operation though. And for that, we go to our animation.

You can see how it's dropped into place very carefully. It could snap the pipeline making things worse, by the way. But the robot subs actually connect a new line to the barge on the surface.

So there you go. Simple -- not so sure.

CNN's David Mattingly live in Venice, Louisiana this morning.

So, David, where are we right now in this operation and will -- when will they actually be able to start sucking up that oil?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, a device is on its way down. They think it's going to take about two days for it to reach the ocean floor. And if all goes well, if they put it in exactly the right spot, they hope to be able to be pumping oil from the ocean floor up to a containment vessel sometime early next week.

So the delicate part is getting this thing in place over the last -- the largest of the two remaining leaks at the bottom of the Gulf of Mexico. If this works, their hope is that they will be able to siphon off 80 to 85 percent of the oil that's now leaking into the Gulf of Mexico.

PHILLIPS: All right. Well, is there a new sense of urgency now that the oil is washing up onshore?

MATTINGLY: Oh, absolutely. Everyone thought that this was going to happen. And now we have confirmation that the oil is washing up onshore on one of the barrier island on the east side here of Louisiana. There are reports that the oil is migrating west of the mouth of the Mississippi River.

If this continues, fishermen are going to be very concerned because they were hoping that those waters would be spared and that they'd somehow salvage some part of this fishing season.

So everyone very anxious to see if they can stem the flow of this oil and keep this disaster from getting any bigger than it already is.

PHILLIPS: David Mattingly, live in Venice, Louisiana. David, thanks.

All right. So the votes are in in the U.K. But we still have no winner. Sound familiar? Prime Minister Gordon Brown says he's not going to step down. Well, he doesn't really have to.

His Labour Party lost a lot of seats in parliament but the conservatives led by David Cameron didn't win enough. So now we have what they call a hung parliament. Not quite as good as hanging chads but it'll have to do for now.

Here's the PM just moments ago. The next step is coalition building and possible confidence votes. We're going to have much more on that coming up next hour.

The tale of the tape. What a fireworks store surveillance camera reveals about the would-be Times Square bomber. We're going to roll the video.

REYNOLDS WOLF, CNN METEOROLOGIST: And much better weather today for parts of the Gulf Coast and for Nashville for the big cleanup. The problem is, though, we may see some rough weather for parts of the Ohio Valley, maybe even some tornadoes.

The full story is coming up. You're watching CNN.

(COMMERCIAL BREAK)

PHILLIPS: That's our man. Succinct words from the FBI when agents saw the surveillance video from a Pennsylvania fireworks store. The tape appears to show Faisal Shahzad buying about $98 worth of fireworks more than a month before he allegedly tried to blow up his car in New York's Times Square.

The FBI says the M-88 fireworks purchased at the store matched those found in Shahzad's car and his Connecticut home.

But check this out. The store owner says that the fireworks contained only 50 milligrams of pyrotechnic compound. That's equal to about one-sixth of an adult aspirin. So who gave him the money and who provided the support? Investigators are retracing the steps of the Times Square bombing suspect and it's taken them to Pakistan. That's where four members of an al Qaeda-linked group are being questioned.

CNN's Nic Robertson has also gone to Pakistan to Faisal Shahzad's movement there to last year. Here's what he found.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): April 17th, 2009, Faisal Shahzad becomes an American citizen. He has no known ties to terrorism. Only two and a half months later, he returns to his homeland.

(On camera): When he left the United States, he came to Pakistan's port city Karachi. To this middle class neighborhood. And within a week, according to senior Pakistani government officials, he met a man who took him to meet Taliban leaders.

(Voice-over): On these streets, a neighborhood near his wife's family, Pakistani police believe are some of the clues to Shahzad's radicalization and a new threat facing the United States.

(On camera): This is the mosque here where Faisal Shahzad is reported to have attended when he came to Karachi. And it's where also, we understand, at least one of the people detained by the authorities here was picked up.

And what about Faisal Shahzad? Did Faisal Shahzad come here to this -- did he come to madrasa rabbi (ph)? Did he come to the mosque here?

(Voice-over): They tell us no one was picked up here. They also deny reports the mosque has ties to an outlawed radical Islamic group connected to the Taliban and al Qaeda.

(On camera): Does this mosque, though, have a history of a relationship with J.C. Mohammed in the past?

UNIDENTIFIED MALE: (Speaking in foreign language).

ROBERTSON: It's just a school.

UNIDENTIFIED MALE: (Speaking in foreign language).

ROBERTSON (voice-over): They tell us we must be confused with a nearby mosque of the same name.

(On camera): Well, despite what they told us that there were two mosques by the same name, we've just run a few checks and it's clear that this is the right place.

(Voice-over): Shahzad did pray there. It turns out the man in question was picked up a few blocks away. (On camera): This is where the police tracked down the man who took Shahzad to meet the Taliban leaders, an amusement park in Karachi. And so far all that the tensions that have taken have happened within a few miles of here.

(Voice-over): It's hundreds of miles to the Pakistani Taliban strongholds in the tribal border region where officials tell CNN Shahzad was taken for his meeting. The Pakistani Taliban deny they trained Shahzad but they do praise him, and following in the footsteps of al Qaeda, vow more attacks like his in the United States.

Nic Robertson, CNN, Karachi, Pakistan.

(END VIDEOTAPE)

PHILLIPS: Clothes, furniture, pictures, even the kitchen sink, piles of stuff on lawns and sidewalks in flood-stricken Tennessee. Six days after record-setting rains the water has receded but the disaster, well, it will be around for quite some time.

President Obama has declared 10 Tennessee counties disaster areas. FEMA says more may be added. Thirty-one people died in three states. Residents cleaning up now.

And there are signs of life returning to normal in some parts. City workers are back on the job. Schools are also starting to reopen.

And be sure to tune in this Tuesday. Tune in and turn up the sound. The legendary jam band Widespread Panic is going to be here in studio jamming for us and telling us how those heartbreaking scenes from Nashville have really hit them hard.

They've helped other folks in need and they're going to help middle Tennessee, too. They're going to give back that region -- they're going to get back to that region that they love so much.

You don't have to be a long-time spread-head to love these guys either. Don't miss the rare treat right here live on CNN this Tuesday.

I know you like Widespread Panic, Reynolds. They're going to raise some money for those flood victims.

WOLF: Absolutely. You know, it's funny when you look at some of that video how something just like a photo album can mean so much to a family. And then when things like that are gone forever, I mean, it's just -- kind of hard to wrap our minds around scenes like these.

PHILLIPS: And so many of the musicians have come forward. You know, because it's a musician's town. I mean country, rock, blues -- you name it. And they're saying, OK, our houses may be OK, or we may have taken a hit but there are very poor areas in this state and we got to all pitch in and they're doing that.

WOLF: The only thing, too, Taylor Swift, just last night, about half a million dollars has raised for this. And what a great cause. So many wonderful things to see.

(WEATHER REPORT)

WOLF: All right, you're up to speed with the forecast. Kyra, let's send it back to you.

PHILLIPS: All right. Reynolds, thanks so much.

WOLF: You bet.

PHILLIPS: Ricky Gervais. I think that guy is going places.

(BEGIN VIDEO CLIP)

RICKY GERVAIS, COMEDIAN: Not only am I one of the most influential people in the world, that's clear. I'm also live on CNN via satellite from London with an earpiece and everything. It's like I'm -- I've got really important breaking news.

(END OF VIDEO CLIP)

PHILLIPS: Mr. Gervais, no longer live on CNN. But hey, we saved the tape. If you love "The Office," well, you owe him a great debt. He'll be here first to tell you about it.

(COMMERCIAL BREAK)

PHILLIPS: Checking top stories now. More jobs but more people making unemployment claims. And here's why. 290,000 jobs were created in April, the best showing in four years and previously discouraged people now looking for work have pushed the jobless rate to 9.9 percent.

The Times Square bomb suspect linked to a Pakistani Taliban group but U.S. officials say it can't be sure that group directed the failed attack. Investigators looking for a courier who funneled cash to Faisal Shahzad.

And the mission to cap that underwater oil gusher under way in the Gulf of Mexico. BP says the containment dome is being lowered to the side of that sunken oil rig. It'll take some time, though. Capping (ph) is expected to begin early next weekend. Success is not guaranteed.

Step away from that salad bar. Some of the lettuce could make you sick. One company now recalling romaine.

(COMMERCIAL BREAK)

PHILLIPS: Arizona's new controversial immigration law brings traffic to a halt in downtown L.A. It's OK, no one is hurt here. But the protesters chained themselves together making it hard for police to even move them.

Then they laid in the middle of the street blocking a federal detention facility. Traffic was held up for about four hours. More than a dozen protesters were arrested.

U.S. border agents giving a helping hand to their counterparts across the border of Mexico. The Americans are helping train the Mexican officers in spotting drug smugglers and handling violence on the border.

In addition to weapons training, the Mexican police are taught techniques for detecting hidden compartments in cars and trucks that carry illegal drugs.

(BEGIN VIDEO CLIP)

TOM PITTMAN, U.S. BORDER PATROL: We want the good guys to win. We just hope that if they get into a situation where they have to utilize this type of training that they prevail and go home to their families just like we want to do every day.

UNIDENTIFIED MALE (Through Translator): It gives us more confidence to be working here. We are the support between the two countries. Because of the drugs, we are trying to keep it off the streets. It affects both countries. This helps us control fear and build confidence.

(END OF VIDEO CLIP)

PHILLIPS: As a precaution, those Mexican police officers in the program are not being identified.

We've got an update on Toyota's most recent public relations nightmare. This time, the news is good for the embattled automaker. "Consumers Reports" magazine lifting its "don't buy" recommendation on a Lexus sport utility vehicle.

You may remember this year's model of the GX-460 luxury SUV failed an emergency handling test and the magazine told its readers don't buy it. That led to Toyota recalling about 10,000 of the vehicles in the U.S. The magazine now says Toyota has fixed that be problem by updating its software.

An E. coli outbreak may be linked to romaine lettuce. At least 19 people in three states have been sickened. A dozen had to go to the hospital. And it's led to a recall of romaine products by Freshway Foods in Ohio. The romaine was distributed in 23 states.

Now we have to stress that the lettuce being recalled is not those prepackaged salads that you get at the grocery store. It's the bulk stuff that you see right there at the salad bars. The FDA is focusing the investigation on lettuce grown in Arizona.

So what's for lunch? How about a nice, juicy burger? Forget the Whopper, Big Mac, Baconator, even that five-pound burger up in Boston.

Try this one on for size. A mere 590 pounds. A chef up in Canada cooked this one up for some kids. He made a special griddle equipped with a forklift just so he could get it on the bun. Of course it's a world record attempt. The old record is 185 pounds, by the way. But it's not just for publicity. Also for a good cause. The burger party raised nearly $10,000 for a camp for children with burn injuries.

(COMMERCIAL BREAK)

PHILLIPS: Checking top stories now. BP trying to put a cap on that troubling oil spill in the Gulf of Mexico. A massive containment dome is being lowered nearly a mile to the site where oil has been gushing out. It could be Monday before that dome is finally in place.

Several airlines alerted that Times Square bombing suspect Faisal Shahzad's name had been added to that government no-fly list. But an administration official is confirming that Emirates Airlines -- the one that's the suspect got on -- wasn't among the airlines contacted.

And in Europe, several nations considering a massive loan to help Greece pull out of its economic miss, they would provide $100 billion of $146 billion bailout. It's fear that Greece's meltdown could affect recovery of the global economy.

Wall Street is the center of attention today. We all watched in shock yesterday as the Dow Jones Industrial Average plunged 400, then 500 and eventually nearly 1,000 points. Thankfully the Dow came back just a bit by the time the closing bell rang.

Let's go straight to the New York Stock Exchange to see what's in store for today.

So, Poppy, what are traders expecting?

HARLOW: A full floor of traders behind me, Kyra. We're about a minute away from the open here on Wall Street. Looking good heading into that after that huge decline yesterday.

This was a bad day made worse by technology. That's the bottom line. Let's stop talking about glitches or human errors. We don't know that. What we do know is that this market was down 500 points before the precipitous decline where it fell 1,000 points.

The Greece troubles, the European debt woes, our unstable economy, that is what traders were looking at. They said to me, you know what? This was computers getting ahead of man. And sometimes you've got to take the plane off autopilot.

Computers trade faster than men and women in this marketplace and they were doing most of the trades yesterday. Technology, Kyra, was part of it. But honestly, the fundamentals of the global economy were what really drove this selloff.

That seems to be the consensus here. We've got investigations going on by the SEC, the CFTC. More will come but this is what's critical.

Looking at Dow futures now, we are higher. We are about to open on Wall Street. You're going to hear the opening bell in just a minute. Heading into Friday's trading session, what is so important is can this market pull back? Because the decline of 348 points that we saw yesterday on Wall Street was the biggest decline we've seen in one year and that really, really matters.

What also matters is the great jobs number we've got this morning. Much better than expected.

Taking a look, the Dow opening down just slightly here, down about five points right now, Kyra, on the open. We're going to keep a very close eye on this market throughout the day where we were up. Now, we're down.

We'll keep an eye on it, Kyra. And more, of course, on CNN money. Follow it all day there.

PHILLIPS: Sounds good. Thanks, Poppy.

HARLOW: You got it.

PHILLIPS: And hey, just because that brit wit, Ricky Gervais, was on CNN yesterday doesn't make him yesterday's news.

(BEGIN VIDEO CLIP)

RICKY GERVAIS, ENTERTAINER: Not only am I one of the most influential people in the world, that's clear. I'm also live on CNN via satellite from London with an ear piece and everything. It's like I got really important breaking news.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: It's a long and proud tradition in the history of American sitcoms, taking stuff from the Brits on the family based on the British series, "Till Death Do Us Part," "Stanford and Son" based on "Steptoe and Son." "Three's Company" was taken from "Man About the House" and in modern post-leisure suit time, we have "The Office."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What's the most inspiring thing I ever said to you?

STEVE CARREL, "MICHAEL SCOTT": "Don't be an idiot." Changed my life.

(END VIDEO CLIP)

PHILLIPS: All right. Here is "The Office" in English. Think of this as the mother sitcom.

OK. Don't let the awkward dancing fool you. That's what an influential genius looks like. If you love The Office, you are feeling Ricky Gervais' influence. We call it the Gervais effect. CNN's John Roberts had the pleasure of talking to him yesterday. Got to ask him what it's like to be so darn importance. They dance like you, J.D.

ROBERTS: Let's not go there. It's incredible with Ricky Gervais because here is a guy that gives any one of us who have looked for a second career and hope that maybe there's something else out there for us to do and hope. He didn't start doing comedy until he was 38 years old. "The Office" he started when he was 40. And everything, literally, everything he has touched since then, Kyra, has turned to gold.

At the age of 48, he is a media mogul. He is coming here next week, two sold-out shows at Madison Square Garden to do standup comedy. I mean, if you could be anybody in this world, Ricky Gervais might not be a bad choice.

PHILLIPS: It sounds like kind of wanted to be you. Let's listen to this back and forth.

(BEGIN VIDEO CLIP)

GERVAIS: Not only am I one of the most influential people in the world, that's clear. I am also live on CNN via satellite from London with an earpiece and everything. It's like I got really important breaking news. This is a dream come true.

ROBERTS: You do. And we have the global resources to bring it to the world.

CHETRY: You are on every airport in the entire country this morning. You talked about being grounded. However, you did declare after getting on this time list that May 1st would be world Gervais Day. How is that celebrated?

GERVAIS: It's not taken off like Christmas, but I mean, it took a long time for Christmas to really take hold. So, I am hoping in a few hundred years that it will be a much bigger day. I also like the fact that as you introduced me as one of the most influential people in the world, you show a clip where I'm basically dancing like a crab.

CHETRY: No. That was good.

GERVAIS: Yes. I like to think it was because I created, you know, a world famous show, but I think it's because I saw (ph) Mel Gibson at the Golden Globes.

ROBERTS: Yes, I was going to say, you're not afraid to take on sacred cows. You talked to the Golden Globes about Mel Gibson's drinking. You made fun of Paul McCartney's divorce. You talked about all the people in Hollywood who get plastic surgery forcing the show producers to quickly cut away from a picture of Meryl Streep to a wide shot. Have you always been a troublemaker?

GERVAIS: Well, look, if you can't have a go at some of the most famous, richest, successful people in the world, who can you have a go at? You know, I'm making fun of people more fortunate than myself, so I can sleep at night. Also, they know it's not true, and they can take it. You know, the A-list is the fine as the B-list as you got worried about. There are the ones that don't take it so well.

(END VIDEO CLIP)

PHILLIPS: He's definitely not on a B-list. Now, he also had a go as we'd like to say at the Guinness World Book of Records.

ROBERTS: He actually has set a record. He's been doing since 2005 these podcasts called the Ricky Gervais show. They've been downloaded 180 million times, Kyra. Can you imagine? 180 million times. That's in the Guinness World Book of Records. He's the most downloaded podcast, but when we asked him about that yesterday, he said on Guinness Records (ph), he said you can get a Guinness record for running backwards with a bottle of milk on your head.

So, he doesn't actually pay too much into that, but he does say, though, that what he has done has been an absolute privilege. He doesn't get up every day thinking about how can I become more famous or how can I be richer? He just does what he does, and he loves doing it? And that's what has put him into "Time" magazine's 100 most influential people of the year edition.

PHILLIPS: I'll tell you what, that show is still going strong, and my guess, it is still be going strong years and years from now.

ROBERTS: You know, it will. I'm sure. This guy is so down to earth. And he has a lot of people around him who keep him down to earth. For example, in the little paragraph that was written about him in "Time" magazine, his good friend and fellow comedian Karl Pilkington said of Ricky Gervais, he said, me calling Ricky influential would be like Einstein's mom calling Einstein a genius. I bet she never did. I bet she was proud of him but really just wished that he would comb his hair.

PHILLIPS: His friends have a good sense of humor, too. It makes sense. They probably write his copy for him, right?

ROBERTS: Absolutely.

PHILLIPS: We got to give him credit.

ROBERTS: It's so incredible the way that humor is translated around the world. "The Office" was seen in 90 countries. I think there are five or six separate productions of it in French, in German. Of course, we got the one here as well, but can you imagine just, you know, starting that late in life doing what he's doing and to be that successful.

PHILLIPS: Yes. It's always nice to have a successful plan B. I guess, we all know that in this business. From television to comedy, we have to always be thinking about plan B.

ROBERTS: I'm still trying to formulate plan A fully. I'm not on the plan B yet. PHILLIPS: All right. Thanks, J.D. We'll talk to you later.

All right. Flashing back to VE Day today, that's victory in Europe Day. May 7, 1945, Germany signed a surrender ending World War II in Europe. German military leaders signed the papers at General Eisenhower's headquarters in France.

Also, Russian composter, Peter Tchaikovsky turns 170 years old today. He's old up (ph) pretty well, don't you think? Or at least his music has.

Sharing his birthday, Thelma Houston, 64 and actress, Tracy Lords, 41. You couldn't see, but now I was making air quotes when I said actress.

(COMMERCIAL BREAK)

PHILLIPS: This story is pretty amazing. She was actually born without arms, without kneecaps, and her feet pointing toward each other, but don't tell 32-year-old Sheila Radzierez that she's handicapped. She might give you a swirling leg kick. Despite being born with a congenital birth defect, Sheila is a tae kwon do student, and next month, she is testing for her black belt.

(BEGIN VIDEO CLIP)

SHEILA RADZIEREZ, TAE KWON DO STUDENT: I'm a person that I just decide I want to do something and I do it. And I don't think of it as if I'm trying to be inspirational. I'm just living my life. I chose to live. I chose to do everything that I wanted to do.

(END VIDEO CLIP)

PHILLIPS: She's pretty darn independent. And she not only takes tae kwon do, she also drives herself everywhere, and she lives on her own.

Walking, most of us take it for granted, but for a little boy from Bolivia, his legs just wouldn't work. And he couldn't walk for most of his life. Now, at age 15, he can, thanks to a doctor at Atlanta and a surgical assistant who went to back for him. More now from CNN's Raphael Romo.

(BEGIN VIDEOTAPE)

JACKIE GAROFALO, SURGICAL ASSISTANT: I call him my little antiutos (ph). He's like my little angel.

RAFAEL ROMO, CNN CORRESPONDENT (voice-over): Jacqueline Garofalo is a surgical assistant. And her little angel is Freddy Chocllou, a 15-year-old boy from Bolivia. Freddie was born with a genetic disorder which affected the growth of the bones in his leg which prevented him from walking normally.

FREDDY CHOCLLOU, PATIENT: We were looking for a place where I would be able to have that surgery, but there were no doctors or specialists.

GAROFALO: I just kind of, you know, fell in love with him, and he has such a charismatic personality and he has one of the brightest smiles and everyone that meets him just falls in love with him.

ROMO: With the help from people from her church, Garofalo flew Freddie to Atlanta.

Dr. Marvin Royster was more than glad to donate his services, but the task ahead was daunting. It required cutting both femurs to change their alignment and straightened the legs without affecting vital tissues, something similar to a total knee surgery. He had discussions with colleagues for days, but he says what finally gave him the guidance he needed was a voice he heard hours before the surgery.

DR. ROBERT ROYSTER, PIEDMONT HOSPITAL: The voice basically came to my head. I think it was God speaking to me, telling me, actually, I'm not asking you to do anything that you do not normally know how to do.

ROMO: The complex surgery lasted five long hours. It's now been four days after the surgery and Dr. Royster stops by Freddy's room. For the first time in his life, Freddy is standing up with his legs straight.

ROYSTER: It is truly, you know, nothing short of a miracle.

GAROFALO: It's an amazing feeling. You just want to smile. You almost kind of want to cry, you know, because this was a child that wasn't able to walk and he can now. It's the most -- it makes me emotional.

ROMO: This is not the first time Freddie has been treated at Piedmont Hospital in Atlanta.

(on-camera): Three years ago, when he was 12, he underwent surgery for the same condition, but as he grew older, it became evident that a second surgery would be necessary if he was ever going to be able to walk normally.

(voice-over): Freddie left the hospital and is now staying with a loving host family Garofalo found.

TITO SANTIAGO, HOST PARENT: I told him, do you want to stay here with me? I adopt you. He said, no, I want to go home. But I'm willing to do so.

ROMO: Freddie still faces several months of recovery, but the prognosis is good. The little boy who couldn't walk will be able to do so thanks to a doctor who heard a voice and a fairy godmother with a big heart.

Rafael Romo, CNN, Atlanta.

(END VIDEOTAPE) PHILLIPS: The bad news, the hospital might not have given those fragile newborns whose lives were hanging in the balance the attention they needed. The good news, doctors and nurses in neonatal ICU might have had the most fabulous finger nails and trimmest eyebrows in the valley. The outrage coming up next.

(COMMERCIAL BREAK)

KYRA PHILLIPS, CNN ANCHOR: OK, moms, you know what I'm talking about here. There you are 25 hours or more of painstaking labor, the sweat, the tears and then finally your baby comes, your dream come true. Everything you ever wanted is right there crying in the delivery room.

But then, the doctor says those heart-stopping words: "There is a problem." Well, if you have been in that situation, then you know how crucial those doctors and nurses in the neonatal ICU are. You're trusting them with your baby's life. These folks have that brand spanking new little life right there in their hands and your peace of mind too; their eyes always watching baby's vital signs.

But hey, watchful eyes and help willing hands are no good unless they look fabulous, right? Get this, accusations that workers at a hospital near Los Angeles gave doctors and nurses beauty treatments when timing babies lives were hanging in the balance. Random acts of cosmetology right there in NICU.

KABC's Nirvana Laura has the outbreak.

(BEGIN VIDEOTAPE)

NIRVANA LAURA, KABC REPORTER (voice-over): Imagine operating a beauty salon with all the tools and chemicals that go with it inside a Neonatal Intensive Care Unit. That's the allegation now under investigation at the Olive View-UCLA Medical Center in Sylmar. And the reason that two staff members are now on paid leave.

UNIDENTIFIED MALE: It's just ridiculous. They should be caring about the patients more and the health of the little kids, too. Newborns, you know, that's ridiculous.

UNIDENTIFIED FEMALE: If my kid was there and they are doing stuff like that, yes, of course, I would want them to get fired, you know. I really think so and they should know better and hopefully that this should be a lesson to be learned.

LAURA: The anonymous complaints were filed with a Joint Commission that accredits the hospital. The reports include allegations that nurses and doctors got manicures and their eyebrows waxed with the salon tools often resting on medical devices.

TONY BELL, SPOKESPERSON FOR SUPERVISOR MIKE ANTONOVICH: Remember these are our county's most vulnerable patients. Many have respiratory issues in cases, they're vulnerable to infection. Having this type of operation in the same facility is unconscionable. LAURA: Tony Bell, spokesperson for Supervisor Mike Antonovich says Antonovich is pushing for full investigation and fast action. Meantime, in a statement released today the Department of Health Services says, "It is concerned by the allegations made against Olive View-UCLA Medical Center. No NICU patients at Olive View were harmed or transferred to other hospitals as a result of these allegations. We are complying fully with the Joint Commission and will take appropriate personnel action if allegations are substantiated."

(END VIDEOTAPE)

PHILLIPS: Yes, are you thinking what I'm thinking? Hey, nurse beauty queen and Dr. Unibrow, next time you need a wax, polish or foot rub, do it on your own time, not on the potentially limited time of a newborn clinging to life.

A lot of news on tap for the next hour; let's check in with our reporters to see what they've got or what they're working on, rather.

We begin with Barbara Starr. She's at the Pentagon. Barbara, what's your headline?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Kyra. Well, we now know the Times Square bomber had deep ties to Pakistan. The question, what is the U.S. going to do next about terrorist networks inside that country?

PHILLIPS: Rob Marciano, what do you have for us?

ROB MARCIANO, AMS METEOROLOGIST: Well, we're live on the Coast here in Biloxi, Mississippi. Yesterday we got a disturbing call that said that there was some oil spotted just offshore about ten miles on one of the barrier islands so we went and checked it out. We'll have that live report coming up in the next hour.

PHILLIPS: All right. Reynolds Wolf?

WOLF: Yes. And we are watching the possibility of some severe weather maybe even some tornadoes later this afternoon for parts of the Ohio Valley and southern half of the Great Lakes. The full story coming up in just a few. PHILLIPS: All right, thanks, guys.

Also ahead, a crime lab technician stealing drugs; explosive allegations that threaten hundreds of criminal cases in San Francisco. The D.A.'s conduct, called into question.

(COMMERCIAL BREAK)

PHILLIPS: Well, it's not just something you expect in Afghanistan; a 3-member rock band. But sure enough, these guys are bucking tradition and the culture of that country. They don't have a recording contract, but they're aiming high.

CNN's Michael Holmes has their rocking story.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT: Among the many repressive things the Taliban forced on Afghans was the banning of all music for being sinful. Today, with the Taliban still an influence and the country still very conservative, music is back, although who knows what the Taliban would make of Kabul dreams.

They're thought to be their country's only rock band. Three guys who share a love of Cold Play, Oasis and the Beatles. The band members come from different parts of Afghanistan, all spent parts of their lives in either Iran, Pakistan or Uzbekistan.

And speak six languages between them, and so they settled on singing in English. It avoided arguments, they say, but there was another reason, too.

SIDDIQUE AHMAD, BASSIST: We were aiming for big things, bigger things and singing in our language would have kind of limited our audience.

HOLMES: Bass player Siddique Ahmad says part of their mission is to show another side of their country to foreigners.

AHMAD: They think it's all about war and suicide bombings and these things, but we want to show a different picture.

HOLMES: And so the band's lyrics are about the usual stuff of pop, love, friendship, teenage angst, but also hope for their country.

Of course, Afghanistan doesn't have much of a history when it comes to rock 'n roll. In fact, it doesn't have any history at all and so the guys are better known outside their own country, their own town, but Kabul Dreams say they're out to change that.

MUJTABA HABIBI, DRUMMER: First, we have to get our people to accept what we are doing because they've not heard this music from their countrymen, but once they hear us, then hopefully they would like it.

HOLMES: With little by way of a music industry in their own country, the trio do pretty much everything themselves. In fact, lead singer Suleman Kadash couldn't join us because he's in Uzbekistan, putting the finishing touches to Kabul Dreams' debut album; a five- song EP.

And what about the Taliban who still run parts of this country.

AHMAD: Yes, we are worried about this. If they know about us and they know that we are playing this type of music I'm sure that they'll probably threaten us.

HOLMES: Meanwhile, Kabul Dreams dream big.

AHMAD: We're hoping to represent Afghanistan internationally through our music and play in different festivals and maybe get a record label contract and a few Grammys. HOLMES: Grammys? Why not?

AHMAD: Yes.

HOLMES: Michael Holmes, CNN, Kabul, Afghanistan.

(END VIDEOTAPE)