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Market Tumbles; Escaped Murderer Captured; Some GOP Donors Eye Mitt and Christie Fears; New Terror Threat for Olympians

Aired February 04, 2014 - 09:30   ET

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

CAROL COSTELLO, CNN ANCHOR: So the bell rang. You heard it there. We're going to talk to some experts about what's happening on Wall Street. Alison Kosik is at the New York Stock Exchange, our chief business correspondent Christine Romans is in New York, along with Rana Foroohar, CNN's global economic analyst and assistant managing editor of "Time" magazine.

Welcome to all of you.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi, Carol.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Thank you.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hey, Carol.

COSTELLO: OK, so, Alison, I want to start with you. At least there's a plus sign this morning.

KOSIK: Exactly. We're seeing green arrows. Something that is really just a nice thing to see. On the screen you're seeing the Dow up about 19 points. This is after it's been kind of a rocky night overnight in markets overseas. Japan's Nikkei plunged 4 percent.

Look, a lot of people are using this fancy word called "correction." Kind of think of it as a resetting. It's -- basically a correction is a 10 percent decline from recent highs. And some people are saying that is where the markets are headed.

Now, here are some levels for you to watch. The S&P 500 sitting at 1,747. If we do hit that 10 percent, the S&P 500 would go to 1,665. Others say, look, this is not a correction. We just got used to the markets doing really, really well last year. Stocks were up 30 percent. The S&P 500 jumped 30 percent last year, so we got used to that every - you know, sort of every week we would sort of see the S&P 500 and the Dow make these record highs. We're not seeing that this year, so get ready for a lot more volatility this year.

One trader telling me, look, this is normal to see these sort of pushes and pulls going on with the market. That these speed bumps are really what the market needs to avoid bubbles. One other trader I was talking with said, look, you may not see a real correction for another few months. So, really, fasten your seatbelt for later in the year.

Carol. COSTELLO: And, of course, if you're older and you're looking at your 401(k), Christine Romans, those speed bumps are more than speed bumps, they're horrible, painful things to endure.

ROMANS: They are. But if you're older and you're looking at your 401(k), you shouldn't be 100 percent in stocks anyway. Remember that. I mean that old rule of thumb is, the closer you get, the more you should be scaling back.

Sure, your 401(k) over the past couple of months has hit this speed bump, but there were no speed bumps for like two years and so a lot of people, Carol, are saying that when you look with perspective at this market, it needs to have what they call on Wall Street the pause that refreshes.

There are a lot of fundamental reasons why investors are nervous right here, but most importantly you can't have a stock market that just goes straight up. And it won't. I'm telling you right now, it won't. So this pullback right here, the most important thing is, do you come back and have a correction, the 10 percent pullback? We've only had, you know, four pullbacks in the past five years and only two of them were actually corrections. Do you have a pullback here or does it feed on itself and get to be something really ugly? And no one has a crystal ball to tell you how that's going to happen, Carol.

COSTELLO: Although, Rana, I was looking back overtime and the markets have dropped sharply, what, in 2008, in 2010, in 2012. So we've seen this kind of thing before.

FOROOHAR: Absolutely. The And, you know, the fact is that we've gotten used to, in the last couple of years, much less volatility in the markets than is normal. We're going to be seeing a lot more volatility as you heard earlier. And there are also some things happening in the economy that have caused traders to be a little bit nervous. Some of the manufacturing data for the U.S. has come in weaker than expected. China growth is slowing. There's concerns about a banking crisis there. So there are some real things going on, but let's remember also, one month of bad data is not enough to make people nervous. Three months and then you should start to get nervous and worry about a real correction.

COSTELLO: OK. So we'll all step back from the ledge. Thanks so much Alison Kosik, Christine Romans and Rana Foroohar. I'm back in a minute.

ROMANS: Thanks.

(COMMERCIAL BREAK)

<09:37:20>

COSTELLO: Just inches away from an escaped multiple murder and not even knowing it. A convict who broke out of a Michigan prison is seen on surveillance video at an Indiana convenience store. At the same time, a woman he abducted is calling 911 using her cell phone in the store's restroom. That woman is safe and sound this morning and that man is back in custody. CNN's George Howell is in Indiana with more for us this morning.

Good morning, George.

GEORGE HOWELL, CNN CORRESPONDENT: Carol, good morning.

So there's the kidnapping, the alleged theft of two vehicles, not to mention the escape from prison itself. Fair to say, in the last 24 hours, it was a wild run of freedom for Elliott that all culminated here in Indiana in a high speed chase that ended in a snow bank.

(BEGIN VIDEOTAPE)

HOWELL (voice-over): A two state manhunt comes to an end overnight after authorities capture an escaped convict serving time for murder. Authorities spotted Michael David Elliott during a traffic stop in LaPorte County, Indiana, after he spent 24 hours on the run from a Michigan prison.

DEPUTY JEFFREY WRIGHT, LAPORTE COUNTY SHERIFF'S DEPT.: He ran over a couple of sets of stop sticks that some of our sergeants had laid out and so his tires were going flat. He lost a little bit of control of the vehicle. He came up to a T intersection and he slid into a snow bank where he wasn't able to move any further.

HOWELL: It began Sunday night when prison guards discovered Elliott missing from his cell. It's unclear how he managed to escape. But once outside, he pulled back the fencing of the two security barriers and crawled underneath. His escape then took a dramatic turn when he abducted a woman in Ionia, Michigan, forcing his way into her car and driving across state lines into Indiana.

911 OPERATOR: He has a hammer?

UNIDENTIFIED FEMALE: And a box cutter.

911 OPERATOR: And a box cutter.

HOWELL: Surveillance footage shows Elliott on the run, inside a convenience store, paying for gas. While there, his hostage was able to lock herself in a restroom and secretly make this desperate 911 call, her abductor lurking just outside the door.

UNIDENTIFIED FEMALE: Yes. Occupied. Sorry, it's taking me longer than what I thought.

911 OPERATOR: Is that him?

UNIDENTIFIED FEMALE: Yes. He's knocking on the bathroom door saying let's go.

HOWELL: Her ploy worked. Elliott left the woman and ditched her Jeep just 20 miles away in Shipshewana, Indiana.

UNIDENTIFIED MALE: They (ph) say you killed four people. Those charges true?

MICHAEL DAVID ELLIOTT: No.

HOWELL: Elliott was serving five life sentences for a 1994 conviction for killing four people. Authorities say, up until now, he was known as a good prisoner.

(END VIDEOTAPE)

<09:40:00>

HOWELL: So, from possession of stolen property to resisting law enforcement, those felony charges, Elliott will remain here in La Porte County, in the jail here. However, authorities here in Indiana will be speaking with folks, Carol, in Michigan about where he will serve the life sentence.

COSTELLO: George Howell reporting life from La Porte, Indiana, this morning. Thanks so much.

Still to come in the NEWSROOM, Chris Christie is stepping to the mic once again, denying any involvement at all in that bridge controversy.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: The most important issue is, did I know anything about the plan to close these lanes? Did I authorize it? Did I know about it? Did I approve it? Did I have any knowledge of it beforehand? And the answer is still the same. It's unequivocally no.

(END VIDEO CLIP)

COSTELLO: But today there are new signs that despite Christie's comments, he is losing ground among Republican voters. We'll tell you who is taking his place, next.

(COMMERCIAL BREAK)

COSTELLO: Despite his adamant denials of any involvement with bridge- gate, Chris Christie seems to be feeling the impact of a scandal that forced the ouster of some of his top allies. That's according to a new CNN/ORC poll which shows that Christie is no longer the 2016 favorite among Republicans. Former Arkansas Governor Mike Huckabee has jumped to the head of the pack, followed by Rand Paul. Christie is now in third place, tied with Jeb Bush. He previously held an 11 point lead. And the 2016 Republican field could get even more crowded if some Republican donors worried about Christie's troubles are rumored to be looking to Mitt Romney as a possible alternative. But in a new documentary about Romney's failed 2012 bid, the former candidate says that likely won't happen.

<09:45:00>

(BEGIN VIDEO CLIP)

MITT ROMNEY, FORMER PRESIDENTIAL CANDIDATE: My time on the stage is over, guys. I mean I'm happy for the time I had there, but my time is over.

(END VIDEO CLIP)

COSTELLO: Oh, but get this, if Romney were to run, he currently holds a lead in the New Hampshire Republican primary with 25 percent of the vote. Joining me now, CNN political analyst and editor in chief of "The Daily Beast" John Avlon, CNN political commentator and Republican consultant Alex Castellanos, and CNN national political reporter Peter Hamby.

Welcome, gentleman.

JOHN AVLON, CNN POLITICAL ANALYST: Good morning Carol.

ALEX CASTELLANOS, CNN POLITICAL COMMENTATOR: It's good to be here.

COSTELLO: Ok so Alex, Mitt Romney, seriously?

CASTELLANOS: No and not seriously. Mitt Romney right now is the best known Republican candidate because he ran last time. The Democratic field, Hillary Clinton is very well developed. People know Hillary. And within the Democratic Party, she is beloved.

The Republican candidates are really the folks that didn't run last time -- most of them. The Scott Walkers, the Jeb Bushes, the Chris Christies -- our fruit is not as ripe as the Democratic candidate.

So what does that mean? Mitt Romney is kind of a parking lot. Republican voters are kind of sitting in that parking lot right now idling in their cars waiting until our candidates develop a little more. And then they're probably going to go somewhere else.

The Republican Party knows it can't go backwards. We've had enough losing elections. Not because Mitt Romney ran a bad campaign or was a poor candidate. We just have to move forward from the past from being the party of no to explaining how our principles are a better way to grow an economy for example.

So going backwards is not what the Republicans are looking for. They'll get out of that parking lot.

COSTELLO: Yes speaking of ripened fruit, but Mike Huckabee John is ripened fruit right. He's familiar to Republican voters, he's run before.

AVLON: Yes. No, he sure is. But you know, the endurance of Mike Huckabee, I mean he has this sort of zombie like quality he keeps coming back. And it's because he appeals to so many different elements of the GOP base. Southern, Evangelical, Fox News host and so -- and he's sort of a compassionate conservative. He can deliver a positive message that Alex was just talking about.

The fact that he keeps coming back by being sort of the perfect color by numbers candidate is a sign how much the base really wants that comfort. Because right behind him is Rand Paul that is a radically different vision. And that's a very interesting contrast to the top two folks in the new CNN poll.

COSTELLO: And --

CASTELLANOS: But Carol, one thing I'll point out. If you're -- if you do campaigns for a living and you look at this survey, you'd rather be someone other than Mike Huckabee. Because Mike Huckabee is well known, he has run for president and even though he's in the lead, it's not that impressive. You'd rather be one of the lesser known candidates with more potential than Mike Huckabee frankly with less potential.

COSTELLO: Ok and I wanted to touch on Chris Christie because he's certainly not giving up his dreams of becoming president, right -- Peter?

PETER HAMBY, CNN NATIONAL POLITICAL REPORTER: No I don't think that's the case at all I mean there was sort of a rush to judgment here that he was done in 2016 after these multiple controversies popped up in New Jersey. But there's -- there's really no indication from his team that they are giving up the 2016 hopes.

Christie is actually going to Texas this week as chairman of the Republican Governors Association to raise money for that committee in Dallas and Houston. He's going to Illinois next week to raise money. He's coming to CPAC, the big conservative conference here in D.C. in March.

Look they certainly have the focus on the near term politically helping governor win in 2014 and obviously salvaging some kind of legislative agenda in New Jersey this year and next.

But make no mistake, they still have 2016 in their sights. They're just certainly focused on what's happening right now in New Jersey.

COSTELLO: But what a contrast on the Republican side and the Democratic side. I mean the push for Hillary Clinton is really ramping up. We have former Obama officials helping with strategy. One PAC raising funds for Hillary Clinton but the Republicans despite those to move up a primary convention cannot even coalesce around one candidate at the moment -- John.

AVLON: But -- but well but look I mean what's happening with Hillary Clinton and the Democratic Party is totally historical. I mean never has a party solidified this way around a non-incumbent. And obviously the brand name Clinton helps. Really that's what the Republicans have done in the past, they've had enormous fidelity to brand name, the conventional wisdom front runner, the person who didn't win last time.

For Republicans, this sort of war lord status of an open field is dramatically different. So you've got a real role reversal between the two parties.

COSTELLO: John Avlon, Alex Castellanos, Peter Hamby -- that's all the time I have this morning. So thank you so much. I appreciate it.

AVLON: Thanks Carol.

COSTELLO: Still to come in the NEWSROOM, can Russia's ring of steel be penetrated? As President Putin arrives in Sochi this morning, a new threat is made against Olympians.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

<09:53:22>

COSTELLO: There are new reports today of threats targeting the Olympics. Austria's Olympic Committee has received a letter threatening to kidnap two of its athletes. The latest security concern comes as Russian president Vladimir Putin arrives in Sochi for the games he pledged would be the safest ever.

CNN's Nick Paton Walsh is in Sochi with more for you. Hi Nick.

NICK PATON WALSH, CNN CORRESPONDENT: Carol we don't know much about this threat. We do know the letter is said, according to Austrian media, to have originated from Russia. We do know it suggested perhaps two Austrian athletes may be kidnapped if s they come to Sochi.

But also reports have been suggesting the Austrian National Olympic Committee consider it perhaps to be a hoax there being many of these in the past -- remember the e-mails going around which suggested half could be threats to. That went to about five of the nations attending here. And of course, Carol, to point out there's a huge difference between sending a letter or an e-mail and actually being able to pull something like that off inside the ring of steel behind me.

That's the key issue that Vladimir faces -- Putin faces as he arrives here today. He promised security. Barack Obama has backed him up saying it will be safe for people to travel here. But the key question is the 37,000 police and security officers he sent here, the cameras in the sky, the lengthy electronic interception devices put around here and the campaign across Southern Russia in the last year or so to clamp down on militancy is now going to deliver. Most people I think, think Sochi itself could be safe but of course Southern Russia is a huge area, a long history of volatility. People are perhaps slightly more anxious about what may follow in the weeks ahead there -- Carol

<09:55:02>

COSTELLO: I know President Putin is in Sochi today. What's he doing?

WALSH: The first thing he did was to go a leopard rehabilitation center. That's a place he opened himself in 2009. There are a number of kittens there, I believe, that have been named -- one about six- month-old called Thunder. That got the President's attention in particular. State media saying he already knows many of the animals there as well.

He's also going to be attending the 126th annual assembly of the International Olympic Committee here. We're expecting to hear from him two. (inaudible) he gave some brie comments early on, welcoming people to this particular events. But these are really his gangs. In many ways, this $52 billion construction behind is the pinnacle of the 40 years. It's like we are leading the Russian state about reminding people of a former (inaudible) o the Soviet Union of which he was proud -- among which he was raised in the KGB -- Carol.

Nick Paton Walsh, reporting live from Sochi this morning. Thanks so much.

The next hour of "CNN NEWSROOM" after a break.

(COMMERCIAL BREAK)

COSTELLO: Good morning. I'm Carol Costello. Thanks so much for joining me.

Just minutes from now on the Hill and under the microscope, lawmakers will grill the chief financial officer of Target about one of the biggest security failures in retail history. As many as 110 million people may have had their personal information stolen in a massive data breach. Its size and scope have ballooned since it was first revealed.

Joe Johns is our senior Washington correspondent; he joins us now with more. Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Carol. Yes, we are waiting for that hearing. John Mulligan, the CFO of Target, is going to be the man of the hour.

<10:00:05>

JOHNS: And we have been able to take a look at what are his prepared remarks.