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Dow Tries to Claw Back; Apple in China; NSA Reforms; Christie Heads to Florida; Family Sues over Execution; Family to Sue after Execution Takes 25 Minutes; "Duck Dynasty" Ratings Take a Dive; Mutts get Respect at Iconic Dog Show

Aired January 17, 2014 - 09:30   ET

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

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol.

You know, you look at fourth quarter earnings season, so far it was gliding along very nicely and then all of a sudden a couple of companies spoiled the party with results that missed estimates. So we've seen the Dow make some triple digit moves most of the week, but not all in the same direction. And you know what that shows? It shows indecision. And indecision generally means declines. And that's what's happening overall for the market so far this year. Because you look at the Dow, it's down about 1 percent so far this year. And as opening bell rings, we see the Dow down 12 points.

So, once again, a week into earnings season, mixed corporate results. We've got stocks caught in the middle.

Carol.

CAROL COSTELLO, CNN ANCHOR: OK. Well, let's talk a little bit about iPhone because it's a big day for the iPhone in China. Why is that?

KOSIK: It really is a big day for Apple because Apple had the opportunity right now to sell iPhones to 700 million new customers. Think about that number. That's twice the population here in the U.S.

Why so many? The iPhone is now being sold through China Mobile. That's a Chinese provider. Before today, the iPhone was sold by China's smaller mobile phone companies. Look, even CEO Tim Cook got into the action. He went to China for the occasion. He handed out autographed iPhones, getting everybody excited for this massive Chinese carrier to start selling these phones.

But, look, no doubt about it, Apple's got a lot of work ahead of it because it's not that popular in China. Apple only has a 6 percent market share there. It's in fifth place behind other Chinese mobile phone companies. Part of the problem is that iPhones there are really expensive. They go for $700 to $800. And they don't get the huge subsidies that we get here. So, for once, Apple is the underdog. But I'm thinking, it ain't going to be the underdog for long.

Carol.

COSTELLO: I'm thinking you're right. Alison Kosik, thanks so much.

KOSIK: Sure.

COSTELLO: Checking other top stories this morning at 31 minutes past the hour. Three men now under arrest in connection with a wildfire that scorched 1,700 acres near Los Angeles. Police say the young men were tossing paper into a camp fire when a gust of wind helped spread the blaze. Two homes have been destroyed, one person was injured.

In New Jersey, police continue their search for a missing "Wall Street Journal" report David Bird. Bird left his home to take a walk on Saturday night and he hasn't been seen since. Family members say authorities are following up on all leads, including reports that Bird's credit card was used in Mexico. Disappeared from New Jersey, by the way.

An end to the NSA's telephone collection program as it currently exists and a requirement that the spy agency get permission before it taps those records. Just some of the reforms President Obama is expected to unveil later this morning. And that announcement comes as a new report claims the NSA collect 200 million text messages every single day. Our chief national correspondent John King is in Washington to preview the president's speech.

Will it be more than minor changes, do you think, John?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: The president will lay out some significant changes, Carol, and then he will pass the ball off to Congress, which will be quite interesting, because ever since the Edward Snowden leaks, constant leaks of NSA data, the country has been having a debate about whether he's a hero or traitor, whether this is good or bad. Well, now, Congress is actually going to have a debate and put some things on paper.

He's a few things we do know about the president's speech. He will - the end of metadata as we know it. Metadata, all those phone calls, all those emails that the government collect in a big, sweeping net and then has available to it if they want to go looking for nefarious activity. Some say if they want to go looking for anything, they believe there can be abuse of power. The president will say the government should not have complete custody of that data and it'll ask Congress, ask the Justice Department for some input on how to set up another way to hold that data.

The president will also call for more transparency. He will call for making it tougher for intelligence agencies to access that data, that they have to go to the court repeatedly, as opposed to just having it and being able to reach into it, and more privacy steps as well, including what I'll call an ombudsman, like we have in the news business, to make sure that privacy concerns are being addressed.

So this is the president's marker (ph) today. Then Congress takes it over. It is significant in this, Carol, in that we have a - sort of ac here, a major post-9/11 retreat from government power in this community, post after 9/11 for years and years and years, if the government wanted to do more, it got permission to do more. The country clearly going to step back some now. COSTELLO: And the other very strange thing is Edward Snowden. You know, he's exiled. He's considered a criminal by the U.S. government, yet the president is going to come out and give a speech in an hour and a half to outline changes brought about by that man, Edward Snowden.

KING: And it's a fascinating point you make. Whether you consider him a traitor, a hero, or maybe you're not so sure, some people say both. Some people say he broke the law and he's a traitor and yet he has sparked this debate. Whatever your opinion of Edward Snowden, we would not be at this moment. There are people who say, oh, you know, there would have been some assessment anyway, there would have been some recalibration anyway. There would not be anything near this sweeping or any such public debate, so much information to fuel that public debate out there were it not for Edward Snowden, like him or not.

COSTELLO: Interesting. John King, thanks so much.

With more than a dozen subpoenas issued for some of Christie's closest aides, the New Jersey governor is headed to Florida this weekend. Christie will be wining and dining with wealthy Republicans and some say this could be a test to see how this scandal has impacted Christie's possible ambition for the White House. CNN's Erin McPike has more for you.

(BEGIN VIDEOTAPE)

JOHN WISNIEWSKI (D), NEW JERSEY ASSEMBLY DEPUTY SPEAKER: And there's no intention right now to subpoena the governor.

ERIN MCPIKE, CNN CORRESPONDENT (voice-over): Governor Chris Christie in the clear for now, according to John Wisniewski, the Democratic assemblyman leading the special committee investigating the so-called bridge-gate controversy. The reason? He says because Christie's name has not come up in any documents that have already been reviewed. But the probe is growing in scope. After holding an executive session, the committee decided to subpoena 17 people and three groups they've seen listed in already reviewed documents.

WISNIEWSKI: I want to be very clear those. Those people who received them, some of them may expect them, some of them may not.

MCPIKE: CNN has obtained a list of those being subpoenaed. Among them are Christie's chief of staff, his communications director and his attorney general nominee. Also names already cited in emails, like the chairman of the Port Authority, Christie's press secretary and his former deputy chief of staff at the center of the controversy.

The request for documents comes from newly hired special counsel Reid Shar (ph), the lead prosecutor in both corruption cases against the now imprisoned former governor of Illinois, Rod Blagojevich. To Republicans, that's a point of contention.

UNIDENTIFIED MALE: There are 56,000 lawyers in the state of New Jersey. Couldn't you find one? MCPIKE: Democrats on the committee countered they wanted not only competent but the best in the country and someone without a conflict of interest. For his part, team Christie lawyered up too, bringing on former assistant U.S. attorney Randy Mastro (ph) of New York. But Christie himself is moving on, hitting the Jersey shore Thursday morning.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Whatever test they put in front of me, I will meet those tests because I'm doing it on your behalf.

MCPIKE: This weekend, he'll test the strength of his political standing nationally with fundraisers for Florida Governor Rick Scott and a dinner to cozy up to wealthy Republican donors Sunday night ahead of a likely 2016 presidential run. All this before his second inauguration, which will happen noon on Tuesday at the Trenton War Memorial.

(END VIDEOTAPE)

MCPIKE: Now, on Sunday night, the Home Depot co-founder, Ken Langone, is hosting a big dinner for Chris Christie at his home in North Palm Beach for about 500 wealthy and influential Republican donors. These are people that Chris Christie will need on his side if he runs for president in 2016 and they are expected to pepper him with questions on Sunday night about this bridge controversy and how he's handling it and they'll want him to make them more comfortable before they back him, Carol.

COSTELLO: Erin McPike reporting live this morning. Still to come in the NEWSROOM, "Duck Dynasty" is back for a fifth season, but the ratings have taken a hit after Phil Robertson's controversial interview. Nischelle Turner is in Los Angeles with that story.

Good morning.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Good morning, Carol.

Yes, we are looking at the numbers. They are definitely down. But what does that mean? We'll talk about it when we come back.

(COMMERCIAL BREAK)

COSTELLO: Support for the death penalty has fallen over the last 20 years, in part because we struggle with this question, is it humane, can you kill someone humanely no matter what they've done? Many believe Dennis McGuire absolutely deserved to die. He raped and killed Joy Stewart when she was seven months pregnant. But the way Stewart died has now prompted a lawsuit. The killer's family says the state of Ohio violated the Constitution when it executed Stewart. The state of Ohio used two drugs, one a sedative, the other a pain killer. Witnesses say it took a full 25 minutes for Stewart to die. Alan Johnson, a reporter for "The Columbus Dispatch," describes it this way. "About 10:34 a.m. he began struggling. His body strained against the restraints around his body and he repeatedly gasped for air, making snorting and choking sounds for about 10 minutes. His chest and stomach heaved; his left hand, which he had used minutes earlier to wave goodbye to his family, clenched in a fist."

That report, Johnson, joins me live, along with CNN legal analyst Paul Callan.

Alan, Paul, welcome.

PAUL CALLAN, CNN LEGAL ANALYST: Good morning.

ALAN JOHNSON, : Thank you.

COSTELLO: Good morning. Thank you so much for being here.

Alan, this execution was so much different than the others you've witnessed. Tell us about it.

JOHNSON: Well, it was very different and I've seen about 18 in the last several years in Ohio, all by lethal injection. And they've all been relatively calm and surreal almost because the execution starts, the drugs start flowing and usually the inmate will go to sleep, so to speak, and it's over very quickly. This was very different because it started out like the others, but after three or four minutes Mr. McGuire started gasping for breath, his stomach was really compressing and expanding, and he was choking. This went on, as I said in the story, for a good 10 minutes. And it was very difficult to watch. Very different than anything I'd seen before.

COSTELLO: Were you in the same room as his children?

JOHNSON: We are in the same area. It's a very small room that's got a divider in between it, but there's a door. The inmate family is on the left side, the victim family is on the other side. They can't see each other, but the reporters are in the back and can go between the two small rooms.

COSTELLO: I just wondered what the reaction was in the room where you were as this man died.

JOHNSON: Well, his family - it was his daughter, his son and his daughter-in-law were all in there and they were sobbing almost constantly from the beginning throughout. I can't imagine what they were feeling. The victim's family, they obviously suffered a terrible loss and they were very quiet, completely quiet. In fact, I heard no comment, no reaction, no sobbing, no response from them. Very different from one side of the room to the other.

COSTELLO: And, Paul, I want to ask you this question, because there are many, many people who would say this man deserved to die and who cares if he suffered pain. What difference does it make? And what do you say?

CALLAN: Well, the -- you know, I think what people have to remember here is that death penalty supporters look at this case and say, this young woman, Joy Stewart, was 22 years old when she died. She was a newlywed. Almost in her eighth month of pregnancy, meaning the baby would have been born alive. So, really, two potential - one potential human being and one real human being died here. She was stabbed, strangled, she was raped and then she was sodomized. That's how she died. She would be 47 today. Her baby would be 25 years old today.

Now, he suffered for a few minutes while he was being executed. But if you compare the level of suffering, I would say his execution was quite humane. And also on the issue of suffering, there's no scientific proof here that there was a conscious awareness in him that he was having problems breathing. The first drug that he was administered was to put him out, basically, to put him to sleep. So the labored breathing that was heard over that period of time doesn't necessarily indicate he was suffering from pain. You'll have to see medical experts to say that.

But, the U.S. Supreme Court has said repeatedly that executions are legal in the United States. They've upheld hangings, shootings, electrocutions and, frankly, this is the most humane way. And the Europeans, by cutting off phenobarbital, which is the drug that was used to make these things humane, have really turned it into a more barbaric form of punishment than we've seen in the past. So those who are trying to force the U.S. to eliminate capital punishment have made it worse.

COSTELLO: So Mr. McGuire's family who filed a lawsuit against the state of Ohio saying his execution was unconstitutional -- do they have a leg to stand on?

CALLAN: No, they don't. At least under existing U.S. law executions are constitutional under the Eighth Amendment. This has been looked at repeatedly by the U.S. Supreme Court. And of course every time an execution occurs it goes through our system. This one -- I was -- you know if you look at this. This has been in the courts for 25 years, his case. Testing whether he was guilty and by the way he was unquestionably guilty. And testing whether a proper method of execution was being used -- these drugs were looked at by a federal judge before the execution was administered.

So no I do not think have a leg -- they do not have a leg to stand on. And I think it's pretty outrageous actually that they would think that they're going to get money out of this which is what civil lawsuits are about by filing some kind of a lawsuit in connection with this execution. I think it's disgraceful.

COSTELLO: So Alan, I'll put that question to you. I don't know if you've talked to the family. Is the governor of the state of Ohio looking into this execution or does it all just stop here?

ALAN JOHNSON, WITNESSED EXECUTION: I'm not aware that the Governor is. I know he has stopped previous executions in advance for various reasons including the last one because the inmate wanted to donate his organs to family members. So he stopped that execution.

This went on and I think it remains to be seen about the lawsuit. I'm not sure I agree that they don't have some grounds. They may or may not. But I do know that these drugs, these two drugs were different, they were never used before here or anywhere else. That could be the crux of it that they were using an experimental method. I think that remains to be seen.

COSTELLO: Paul Callan, Alan Johnson thanks so much for the interesting discussion this morning. I appreciate it.

CALLAN: Thank you, Carol.

COSTELLO: I'm back in a minute.

(COMMERCIAL BREAK)

COSTELLO: The "Duck Dynasty's" season premier took a ratings nose dive.

(BEGIN VIDEO CLIP)

PHIL ROBERTSON, "DUG DYNASTY": Who is a great fisherman?

UNIDENTIFIED FEMALE: You.

UNIDENTIFIED MALE: Who is a great cook?

UNIDENTIFIED FEMALE: Mama Kaye.

UNIDENTIFIED MALE: I'm hungry, I'm tired.

(END VIDEO CLIP)

COSTELLO: The season five premier of the A&E reality show was down nearly 30 percent last night compared to season four. Now some are wondering if Phil Robertson's comments to "GQ" magazine about gay people and African-Americans had anything to do with the slump.

Nischelle Turner live in Los Angeles to parse this out for us. Good morning.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Hi good morning Carol. You know that's a really good question whether or not this had anything to do with his comments. It's definitely something to consider with the drop but there is a couple of schools of thought here.

First of all there were big expectations for "Duck Dynasty's" premier on Wednesday after last season's record-breaking premiere. But Wednesday night season five premiere had about 8.5 million viewers, which, by the way, is still a huge number, especially within the cable landscape. But these numbers are down almost 30 percent from last season's premiere. You know the show had a record-setting fourth season debut in August with about 11.8 million viewers.

But A&E this morning is quickly stepping up and saying, looking we're doing just fine. The network tells us that it's basically steady from where the last season left off. "Duck Dynasty's" fourth season finale in October had 8.4 million viewers.

Now, even though A&E did suspend Phil Robertson from filming the show after his comments, he was in the premiere episode he will presumably be in most, if not all, of this spring season because the suspension -- and I kind of do air quote when I say that -- by A&E came when the show wasn't even shooting and the entire spring season had almost been shot Carol.

One other thing to think about here the premiere of "Duck Dynasty" season five went up against the return of "American Idol" on Wednesday night.

So that's a tough head to head to go against. And again I repeat 8.5 million viewers, that's a heck of a lot of viewers. I mean there are shows that would kill to have 8.5 million viewers every week.

COSTELLO: Well, we'll see what happens in the future. Nischelle Turner, many thanks to you.

TURNER: Absolutely.

COSTELLO: In case you haven't heard, today marks a milestone for Michelle Obama. The First Lady is in her words, turning 50 and fabulous. And she'll do it in a big way in a blowout bash at the White House filled with dancing and drinks and reportedly her BFF, Beyonce.

Now in the big day earned the First Lady a spread in "People" magazine. And it's "People's" article that caught my eye. "People" in part focused on the First Lady's bid to keep fit and youthful. In an op-ed for CNN.com, I write, in part, quote, "I'm happy that Mrs. Obama is able to celebrate her special day with loved ones but articles about women turning the big 50 often get under my skin, and not in a good way. People not only asked Mrs. Obama if she had peaked at 50 but whether she would consider plastic surgery or botox. I don't recall anyone asking Mr. Obama when he turned 50 whether he'd consider fillers or stop playing basketball." In fact I don't even remember we made a big deal out of Mr. Obama turning 50. When it comes to women turning 50, heck when it comes to women turning 30 or 40, we seem to value them less."

We'll talk about that in the next hour of the NEWSROOM. And if you want to read my op-ed, you can find it at CNN.com.

I'm back in a minute.

(COMMERCIAL BREAK)

COSTELLO: We just said happy birthday to Michelle Obama and we can't leave out Betty White. So happy birthday Betty White -- she turns 92 years old today. The Guinness Book of World Records says White has the longest TV career in history for a woman -- 74 years. In a recent interview with Parade.com White calls herself quote, "The luckiest old broad on two feet" for still being at work at showbiz. Happy birthday Betty.

The mutts are finally getting some respect. The famous Westminster dog show is going to allow mixed breeds to compete but there are limits. Here is CNN's Jeanne Moos.

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice over): You know the song --

UNIDENTIFIED MALE: Who let the dogs out, who, who --

MOOS: Well, now, it is who let the mutts in. And the answer is that upper crust bastion of purebreds the dog show where pooches gets better treatment than people.

(on camera): Did you hear that mutts are allowed in the Westminster dog show?

UNIDENTIFIED MALE: I did not know that.

MOOS: Is that anything you care about?

UNIDENTIFIED MALE: No, not really.

MOOS: Says the guy walking Dakota the purebred English setter. But if mutts got no respect at Westminster now they are going to get a little. They'll be allowed into an agility competition that takes place two days before the main event.

UNIDENTIFIED MALE: It involves dogs that might not normally be seen at Westminster including mixed-breed dogs. We are excited to have them be a part of the family.

MOOS: Agility competitions are booming in popularity. I mean which would you rather watch, a dog getting picked up by his privates for judging or dogs madly dashing around an agility course over teeter- totters and through tunnels. It is even more fun when they just stop or when a lot of dog has to fit through a little space. Competition like this is what will be open to mixed breeds at Westminster next month.

While they won't yet be allowed into the main events, at least mutts now have a paw in the door. Henry, give me your paw -- paw. You think mutts should be in Westminster?

UNIDENTIFIED FEMALE: Of course. A dog is a dog right. So what if they're mutts?

UNIDENTIFIED MALE: Why not have mutts?

UNIDENTIFIED MALE: I'd watch that.

MOOS: As for purebreds like this spinone, you sound like an entre. How will purebreds react to mutts running amok?

And it is not like these guys will care. They're not going to say -- hey that's a mutt. I don't want him in the show.

UNIDENTIFIED MALE: Yes.

MOOS: Can't we all just get along.

UNIDENTIFIED MALE: The idea that you can be a mutt and still have a life. MOOS: Doggy diversity.

UNIDENTIFIED MALE: Yes, exactly.

MOOS: Inclusivity.

UNIDENTIFIED MALE: Right. For all.

MOOS: And though inclusivity won't extend to mutts competing for best in show, maybe having your hair done. What's the hair style called?

UNIDENTIFIED MALE: The Snooki.

MOOS: -- isn't all it is cracked up to be. I mean mutts, do you really want your tail tickled to make it stand up.

Jeanne Moos, CNN, New York.

(END VIDEO CLIP)

COSTELLO: Awesome.

The next hour of CNN NEWSROOM starts now.

Good morning. I'm Carol Costello. Thank you so much for joining me.

It has been a painful and jarring wakeup call for millions of Americans. There is no such thing as privacy when a skilled hacker wants your secret. Target customers learned that lesson over the holidays in a massive security breach for as many as 110 million people. Today there are new warnings and reports of possible ties to the Russian mob.

Our Phil Black is in Moscow. He is reporting this morning the code is similar to what's being peddled on Russian-speaking Web sites. The other hackers work for our government. Next hour, President Obama announces reforms to the NSA and its massive spying programs that could have collected information on any of us.

We will have more on the NSA in just a minute.

But first, the latest on the Target investigation.