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Dow Hits 16,000; Six Killed in Midwest Tornado Outbreak; Doctors at Odds over Cholesterol Tool

Aired November 18, 2013 - 09:30   ET

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

CHRISTINE ROMANS, CNN ANCHOR: These are gains that bring the year's gains to a very substantial 22 percent plus on the Dow Jones Industrial average. The NASDAQ up 30 percent for the year. S&P 500 up 26 percent. John Berman and I were just talking about how 16,000 is a nice round number. What it really illustrates to you is that you have had a fantastic year in stocks this year if you're invested. About half of America is not invested, I should point out, but 16,000 really is, I think, the period on the sentence of the year's stock market rally. It's been really amazing.

JOHN BERMAN, CNN ANCHOR: The rich getting richer, some of these mutual funds way, way up, and 401(k)s just skyrocketing.

ROMANS: Richard Quest is here with us right now. "Quest Means Business." He's been watching this market rally for us all year as well.

RICHARD QUEST, CNN CORRESPONDENT: Yes, 16,000.

ROMANS: Now you and I -- we all agree it's psychological.

QUEST: Yes.

ROMANS: These are psychological numbers, but it is just the latest, you know, uncharted territory this market has been in. Now the question is, when is it over?

QUEST: Right.

ROMANS: Are people taking money off the table?

QUEST: Right. And you will and it would not be surprising to see a small correction. The big question of the correction is when the Fed starts tapering. And being the sad person that I am, I was looking at some graphs over the weekend which showed the correlation of the stock market rise with when Fed has tapered or when Fed easing has taken place.

ROMANS: Right.

QUEST: And that's what we really need to look forward to. This bull market will pretty much continue until we get a clear sign that the Fed is easing off.

ROMANS: And let's remind people what's going right in the economy. The Fed has been putting all kinds of money into the economy every single month.

QUEST: Eighty-five billion a month.

ROMANS: You've got slow -- slowly improving, slow rebound that is happening in the recovery. You've got companies making good money without having to hire a lot of people. Stocks are a measure of how well companies are doing, not necessarily main street, but companies. And companies have been doing well.

QUEST: And you're seeing companies doing well across the board. It's not just the FaceBooks and the Twitters that are rising the market. CVS, GE, Boeing, all the good, strong, old-fashioned manufacturing stocks are also performing well. And you've got $85 billion of Fed money going into the market. Companies are also sitting, as you know, on a couple of trillion dollars.

ROMANS: Oh, yes.

QUEST: So there's a lot out there. Growth of 2.5 to 2.8 percent at a time when Europe is just about going nowhere fast. No, this is a - I wouldn't say it's the goldilocks scenario yet.

BERMAN: But it's a peculiar things because there is some inverse things at work here. The reason that the Fed hasn't tapered yet is that they're waited for signs the economy is, in fact, really strong and they're not sure yet. And the market, of course, likes the uncertainty of - you know, they don't want the --

ROMANS: Right.

QUEST: The phrase is escape velocity. Has the market - has the economy reached escape velocity? And there's huge -- huge income inequality -

ROMANS: Oh, yes.

QUEST: As well, which has to be remembered.

ROMANS: That's why Wall Street and main street are still two different stories right now.

I want to bring in David Wessel from "The Wall Street Journal." Of course he's been following the economics and the Fed policy and all of this. So 16,000, a nice psychological level, David. We've never been here before. Does it continue? Does this red hot streak on Wall Street last?

DAVID WESSEL, "THE WALL STREET JOURNAL": Well, you know, anybody who really answers that question yes or no is a fool because nobody really knows. But I think there are two things we have to watch. One is, what is happening to corporate profits? There are some times that margins are being squeezed and if corporate profits don't do well, it's hard to imagine the stock market keeps up its streak. And the other thing is, your other guest was just saying is, a lot of this is about the Fed. The Fed is chasing people into the stock market because they're making it so unattractive for people to hold bonds or have money in the bank. And we know from the -- what happened in September, if the Fed flinches a little bit, the market will probably react.

ROMANS: So, David, the word from Janet Yellen last week in her big job interview before the Senate Banking Committee was that she doesn't think the economy is strong enough to pull back that stimulus that the Fed is doing. So how long does that last? I mean if the getting's good, I mean, why won't the bulls just keep plowing into stocks at this point until they get a clear sign from Janet Yellen and the Fed that things are going to change?

WESSEL: Well, they may well do that. I think what she said was the economy is not yet healthy enough for us to pull back on this adrenalin, but she didn't really tell us very much whether she thinks that we're close to that and it might happen in December or January or March or whether it's a long way off.

I think the other thing that she and others at the Fed have been saying is, we're going to try and find a way to taper, to pull back our bond purchases, but we're going to try and reassure the markets that short term interest rates are going to be near zero for a long, long time. That's a pretty tricky message. Ad we know when the Fed tries to get fancy and say a little of this and a little of that, we get a lot of volatility in the market. And I think it's hard to believe that we're going to have every day up, up, up. That's just seems highly unlikely (ph).

ROMANS: Yes. There hasn't been this meaningful correction. And for those of us who really covered markets and followed markets, you usually -- stocks don't just go straight up or straight down. There's these jig-jags that people trade and use to kind of refresh their perspective in a position. We just haven't seen that big pullback yet, have we?

WESSEL: We haven't and -- but what you're suggesting is that one of these days there will be something, and it might not be completely logical the connection, some statement by the president, some wink (ph) by the Fed chairperson, something going on in Europe or China, and the market will wake up and say, my God, what are we doing, and all it takes is a few people to decide all at once that it's gone too far, we want to get out and we'll see that correction. I think that's a possibility. But the problem is, you don't know, does that happen before it gets to 17,000 or does it happen after it gets to 17,000?

ROMANS: Right.

WESSEL: There's just no way to know.

ROMANS: All right, and anybody who's telling you they know exactly what's going to happen next, you're exactly right, David, is either a liar or a fool.

One thing about - just to refresh for anybody just tuning in right now, 16,025 is the level on the Dow Jones Industrial average. We have never seen before.

BERMAN: You're looking at history here. ROMANS: And in your 401(k) you're up probably 20 some percent this year on the bond part of - or the stock part of your portfolio. If you aren't you should really take a look at how you're invested.

One thing I'd like to ask you about is this word "bubble." I've heard people talk about, oh, it's a bubble, it's a bubble. But when you look at some of the valuations we watch for stocks, 16 times earnings for the S&P 500, that's pretty much in line with history. Does it feel like a bubble?

WESSEL: I think that's a really good point. There are times when we can look at the numbers and say, this is almost certainly a bubble, and there are times when we can say it probably isn't. This is somewhere in between. It doesn't look to me like stocks are a bubble overall, but there are some worrisome things. I mean the amount of fraud around the Twitter update (ph) or some of the things that are going on in the corporate bond market, or some of the things that plagued us during the crisis have come back. These kind of weird bonds that paid in-kind rather than in cash. So I think there are pockets of concern but the metrics are not very good. The metrics we have suggest this is not yet a bubble, but we can't be 100 percent sure of that.

ROMANS: Yes. And we never are. David Wessel of "The Wall Street Journal," thanks so much.

And just to reset the story for you, 62-point opening bump on the Dow Jones Industrial average puts us in territory, John Berman, we've never seen before.

BERMAN: It's rarified (ph) territory. Never been this high before. You know, record setting for the Dow.

Richard, you know, we look forward and there are some bumps in the path again, mainly in Washington. You that whole shutdown we just had, that budget impasse? Well, we're scheduled to do it all over again in December and January. How concerned is Wall Street about what's happening in Washington?

QUEST: It's concerned, but only from a distance. What we saw with the debt ceiling and the budget negotiations is Wall Street has an extraordinary capacity for pain when it comes to Washington.

ROMANS: It helps when $85 billion a month is coming in from the Fed.

QUEST: Absolutely. Absolutely. And because of that pain, they will see it. They believe Washington and the evidence is there that they do a deal at the last minute.

I want to just take a -- Christine, we talk about this point. And you and I have never see - well, no one's ever seen it at this sort of level. But these are not normal times.

ROMANS: That's right.

QUEST: This is what the important thing to bear in mind is. We're not watching a Dow that's hitting 16,000 in normal economic circumstances. BERMAN: Because corporate earnings are fantastic or --

ROMANS: It's not doing it on its own.

QUEST: No, it's doing it because we are - and we've got exceptional printing money accommodative policy. Janet Yellen talked about it. This is not a normal economy. It's not a normal market. It's been artificially pumped.

ROMANS: And some conservatives say it's a sugar high being held by the Fed. It's helping the richest Americans, people who invest in stocks, but it hasn't really resulted in a lot of jobs growth yet and that's something, you know, Janet Yellen would like some jobs growth.

QUEST: And do watch out for that correction, which may not come until the Fed actually starts tapering. But come it will. There's no doubt about it. And that's when the investor has to hold in (ph) (INAUDIBLE).

BERMAN: Whether it's January or -

ROMANS: The best way to look at the tapering, I think, for people who might think, what are they talking about tapering -

QUEST: Yes.

ROMANS: It's the training wheels on the economy and the Fed has training wheels on the economy. These training wheels will come off. Will the bike wobble?

QUEST: Yes.

ROMANS: We'll have to see.

BERMAN: Pretty expensive training wheels.

ROMANS: They certainly are.

Richard Quest, very nice to see you.

QUEST: Thank you.

BERMAN: All right, we'll be right back.

(COMMERCIAL BREAK)

ROMANS: Lives lost, communities flattened, thousand this morning without power.

BERMAN: And today the governors of Illinois and Indiana will get a firsthand look at the destruction left by a rare late season tornado outbreak that just slammed into the Midwest. It's now being blamed for at least six deaths. Our meteorologist Indra Petersons is right in the middle of one of the most hard-hit areas, the town of Washington, Illinois. And, Indra, you know, most of us think of tornado season as being the spring. This seems very unusual. How rare is an outbreak like this so late in the year?

INDRA PETERSONS, AMS METEOROLOGIST: I mean you literally just nailed it. Typically in November we see about 50 tornadoes across the entire nation for the entire month. Now we're talking about 68 tornadoes just yesterday. And to put that in perspective, we had a high risk yesterday. That's only the second of the season. And typically, again, we see those in the springtime. We really had all these elements come together and you can now see, especially now that the sun is up, the kind of damage we are looking at. You can literally see cars overturned, even semi-trucks overturned.

Now keep in mind, look at this Google map I have here and compare what this looked like just 24 hours ago. I mean these aren't trailer parks. We're talking about two-story wood framed buildings now that are really unrecognizable this morning. You can actually see a couple here -- people here behind me actually surveying the damage. So difficult in these morning hours when you see literally nothing left on the floor. You look at these trees snapped in half, power lines are down and even some of these light poles are literally twisted on the ground, almost in circles. The fact there's a no parking sign here that's literally twisted around twice. Truly unbelievable the kind of damage you're talking about here.

And this is what they're going to have to do today. The National Weather Service is going to come out and they are going to look at this damage. There's always confusion after a tornado with this fact. How big of a tornado was it? How strong was it? Well, we actually don't know that until the aftermath. They survey the damage and they say, OK, a semi-truck is flipped, what kind of wind damage would it take for this to happen? These are the kind of buildings that were here? How were they built? What kind of wind would it take for that to come down? And then they evaluate the strength of the tornado. So that's what they're going to be doing across the entire region today.

You know, but I do want to get back to, again, why has this happened so late in the season? And the key here is, yes, temperatures were 20 degrees above normal in this region, but still cooler than the spring. So the question is, what allowed it to be in here? What you're looking at is these strong winds that were coming out of the south. So it basically compensated for the lack of that heat and that combined with the cold front and the jet stream that came across yesterday and we had those perfect elements here for the storms that we saw yesterday.

ROMANS: Wow.

PETERSONS: And, unfortunately, truly devastating. The good news here, people least did get the warning to get to safety in their basements in time.

BERMAN: They had a warning of a few days in some cases with the warmer weather, that wind and that cold front making for a pretty lethal combination.

All right, Indra Petersons for us in Washington, Illinois. Thanks so much.

ROMANS: OK, ahead in the next hour of CNN NEWSROOM, a bitter family feud erupts between Dick Cheney's daughters.

BERMAN: And it is all playing out on Facebook for the whole world to see. This is coming up, new at 10:00.

(COMMERCIAL BREAK)

BERMAN: All right. Welcome back, everyone.

We have some important medical news this morning. An online tool used to help doctors identify cholesterol problems in patients is getting a closer look.

ROMANS: That's right. After a leading cardiologist says it overestimates risk and can mistakenly suggest millions of people need statin drugs.

Dr. Steven Nissen, chief of cardiovascular medicine at the Cleveland Clinics. says that the online calculator needs be re-evaluated before it is further implemented.

Senior medical correspondent Elizabeth Cohen here now with more on this story -- good morning Elizabeth.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know this is pretty stunning, because last week we were told that the guidelines were being redone and that more people would probably be on statins. And so now this is what happened.

So two cardiologists at Harvard said well let's go online and try this calculator, let's see how it works. And they put in some different values.

And they said wait a second this calculator says all sorts of healthy people should be taking statins. So they wrote an article in "The Lancet" which will be published tomorrow. There's the calculator right there online. Anyone can use it. And "The New York Times" broke the story today.

Anyhow, so my producer and I went online and we tried it. We put in a 60-year-old man with normal cholesterol and it said he should be on statins. The man that we made up didn't have a family history of heart disease, no diabetes. You know, didn't have any problems but it said he should be on statins. And it certainly made us go -- huh?

ROMANS: Is it a problem with the calculator or are they assuming that more should be on statins than are?

COHEN: The doctors that we've talked to said this calculator is off. Like there's something not quite right about it. It needs to be re- evaluated.

BERMAN: This is confusing enough for people.

COHEN: Yes.

BERMAN: So what do you do?

COHEN: What do you do is you go to your doctor and you talk about two things. You say one, what are my cholesterol levels; and two, what's my general health profile? Do I have diabetes? Did my parents die of high blood pressure or heart disease? Do I have high blood pressure and you make the statin decision that way.

BERMAN: Listen to your doctor a real life human being as opposed to the computer?

COHEN: For now. It think that's what a lot of doctors say as this calculator seems to maybe be not quite right. But you want to think about two things -- your cholesterol measurements and your personal and you family history. Smoosh those two together -- that's a medical term, by the way --

BERMAN: Exactly.

COHEN: -- smoosh those two things together and you can get an idea for whether or not you want to be taking a statin.

ROMANS: And talk to your doctor to be an empowered patient.

COHEN: Right.

ROMANS: I mean really that communication is the most important thing.

COHEN: And it's not just being passive -- right exactly. You need to -- you need to tell your doctor, what did your mother die of, what did your father die of? Did anybody have this or that? It's really important to know your family history and your own history as well.

BERMAN: All right Elizabeth Cohen great advice. Thank you so much.

ROMANS: A squeaky (ph) deal.

BERMAN: Smoosh it all together.

COHEN: Smoosh it all together.

ROMANS: Thanks Elizabeth.

All right still to come, no unbeaten teams left in the NFL.

BERMAN: Peyton Manning and the Broncos knock off the Kansas City Chiefs. We will have the highlights of this terrific game coming up in the "Bleacher Report".

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone.

We are hoping to learn more this morning about an incident that left two people injured during the second quarter of the Jets/Bills game. We're told a man fell from the third level of Ralph Wilson's Stadium -- this is in Buffalo and landed on another fan.

You can see the man slide down the railing right there before losing his balance. What was he doing there? Both men were taken to a nearby hospital for injuries. According to reports the man who fell only injured his shoulder, the second person injured his head.

ROMANS: Kind of hard to watch.

BERMAN: It really is, all right. Other big news in sports.

We have more tragic news coming out of the Philippines, pro golfer Jason Day confirmed that he lost eight family members in the deadly typhoon Haiyan.

Andy Scholes -- Andy Scholes is with us now with more in this morning's "Bleacher Report". Hi Andy.

ANDY SCHOLES, CNN SPORTS: Hey good morning guys.

Well this is tragic news. Jason Day lost his grandmother, an uncle and six cousins in the deadly typhoon and all of those cousins were children. Day is a Native of Australia but his mother is from the Philippines. Her family lives in one of the hardest-hit areas.

Day said that the toughest part for his family right now is just that they haven't been able to communicate with anyone over there. In a statement Day thanked everyone for their thoughts and prayers and asked for everyone to continue to pray for all of those affected by the tragedy.

All right guys. You've got check out this video from yesterday's Nascar race. Paul Minard's car caught fire and then one of his tires exploded in the pit. Thankfully no one was hurt in the explosion. As for the race, Jimmie Johnson didn't win but finished ninth which was good enough to claim his sixth championship in the past eight years. Now this was one of Johnson's best seasons. He won six races, finished in the top ten 24 times. He's being called possibly the greatest of all-time but Jimmie says, tap the brakes.

(BEGIN VIDEO CLIP)

JIMMIE JOHNSON, NASCAR RACER: I'm not going to deny or chase it away. Sure, I would love to be considered that, but you know, if you look at stats, there's still numbers out there that I need to achieve. That's why I say, until I hang my helmet up it's not necessarily a fair conversation to have.

(END VIDEO CLIP)

SCHOLES: All right. We no longer have any undefeated teams in the NFL. The 9-0 Chiefs taking on the 8-1 Broncos last night -- Lindsey Vonn and Tiger on hand for the big game. And Peyton Manning threw only one touchdown, but it was enough. The Broncos never trailed. They hand the Chiefs their first loss of the season -- 27-17 is the final. That of course, means the '72 Dolphins can celebrate at least for one more season that they are the only team to ever go undefeated. In the line up section of BleacherReport.com, today you'll see one "hairy" play. Cardinals/Jaguars, Jason Babin tackles Andre Ellington, by his dreads and he comes out of the pile with a handful of hair. Now guys don't worry. The Cardinals tweeted out a pic saying they got the hair back and Ellington said he's going to stitch the locks back in. So he should be good as new come next Sunday.

BERMAN: Good as new. Yikes.

ROMANS: That looks like it hurt.

BERMAN: That was a job hazard right there. You can't pull someone's hair out. That's not allowed in football.

SCHOLES: No, exactly. It's the Ricky Williams rule. If you have dreads and hair that long, defenders are allowed to tackle you by it. That's what they say.

BERMAN: You're right. I suppose you're right. It is a technicality there.

Andy Scholes, thank you so much for that disturbing image from the football field. Appreciate it my friend.

SCHOLES: All right.

BERMAN: The next hour of CNN NEWSROOM begins right now.

Good morning, everyone. I'm John Berman.

ROMANS: And I'm Christine Romans for you this morning. Carol Costello is off today.

Two big stories we're watching this hour. The Dow just topped the 16,000 mark for the first time ever. We're going to have much more on that and whether it can hold there in just a moment.

BERMAN: Already dipped down below 16,000 this moment but trust us, it was there for quite a while.

First though we want to give you the latest on those deadly tornadoes. The National Weather Service is sending out three teams today to survey the damage from this rare, unusual late-season tornado outbreak that just slammed the Midwest. This left at least six people dead, entire neighborhoods, as you can see right there, flattened; hundreds of thousands of people this morning without power.

ROMANS: 68 reports of tornadoes across the region. Illinois -- one of the state's hardest hit. At least one of the twisters there was an EF-4. That means it was packing estimated winds up to 200 miles per hour. The state's governor declared a seven-county disaster area and plans to tour that devastation later today.

BERMAN: CNN covering every angle of this tornado outbreak with several crews in the region.

But first, we want to start with a look back at how this all unfolded.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Wow. It's on the ground.

UNIDENTIFIED MALE: It's like being under attack.

UNIDENTIFIED MALE: Our father, who art in heaven --