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Early Start with John Berman and Zoraida Sambolin

American Fighting with ISIS Killed in Syria; ISIS Not Retreating in Iraq; Israel, Hamas Agree to Indefinite Truce

Aired August 27, 2014 - 05:30   ET

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

(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN ANCHOR: An American jihadist killed fighting for ISIS in Syria. What Douglas McCain's family is saying about him as President Obama considers new military strikes to help take down the terror organization.

We're live in Iraq with the very latest.

JOHN BERMAN, CNN ANCHOR: Breaking overnight, a freed American hostage back in the United States. Theo Curtis reunited with his family after being held hostage for nearly two years by terrorists.

We'll tell you what he is saying this morning. That's ahead.

ROMANS: A truce in Gaza for now. A new cease-fire reached between Israel and Hamas. Is there any hope now for a permanent peace plan? That can be released.

We're live in Gaza.

Welcome back to EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. Thirty-one minutes past the hour. Great to see you this morning.

The United States confirms an American citizen died while fighting for ISIS in Syria. 33-year-old Douglas McArthur McCain was killed during a battle between rival groups near the city of Aleppo.

McCain was on the U.S. terrorist watch list. He converted to Islam 10 years ago and over time became more radicalized.

He's not the first person to join militants in Syria. U.S. officials estimate there are dozens, perhaps as many as 100 who have tried to join various militant groups there.

Let's get more on this now from CNN's Barbara Starr.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: John, Christine, the American Douglas McArthur McCain killed in Syria, said to be fighting alongside ISIS. His family notified by the U.S. government, telling our Jim Sciutto they had not known that he was in Syria fighting as part of the war going on there. U.S. counterterrorism officials say he was one of the Americans that

they were keeping an eye on, that they were investigating for possibly joining militant groups. And if he had attempted to travel at any point, and perhaps come back to the United States, he would have been subject to additional scrutiny.

So what about U.S. airstrikes in Syria? What about the next step there? Well, by all accounts, U.S. reconnaissance flights are flying along the border, staying for now on this side of the Iraqi side of the border. But having a look into Syria, trying to determine any location of potential ISIS targets that they can.

The real question, of course, is whether President Obama will take the next step and order airstrikes in Syria. But there is some concern at the Pentagon about the law of unintended consequences. U.S. airstrikes in Syria could actually benefit Syrian President Bashar al- Assad whose forces are also battling ISIS -- John, Christine.

ROMANS: Our thanks to Barbara Starr for that.

Douglas McCain's family in Minnesota reacting to this news with disbelief. They say they didn't know he was in Syria fighting with ISIS until the State Department told them he was dead. McCain's cousin can't believe that he's gone. She can't believe what's being said about him.

(BEGIN VIDEO CLIP)

KENYATA MCCAIN, DOUGLAS MCCAIN'S COUSIN: This has been my whole attitude like, he's not dead. My second thinking was, you know, why was he in Syria? I feel like maybe it was some people he was hanging out with because that's not who he is. He's not ISIS. He's not a terrorist. He's a happy person. He's close with family. You know, very close with his mom and his child. Like, I don't believe that.

(END VIDEO CLIP)

ROMANS: McCain's cousin said the idea that he was a jihadist is ludicrous.

President Obama now considering his options for striking ISIS after he approved surveillance flights to gather intelligence on extremist targets inside Syria. U.S. officials admit it will take more than just airstrikes to defeat ISIS.

(BEGIN VIDEO CLIP)

MARIE HARF, DEPUTY START DEPARTMENT SPOKESPERSON: There's not a military solution entirely to the ISIS problem. Obviously, we have to take the fight to them. We're doing that in Iraq. But we need to cut off their funding. We need to cut off the flow of foreign fighters. We need an inclusive government in Iraq that can really come together and push them out of Iraq. All these pieces need to be a part of the strategy in the long term.

(END VIDEO CLIP) ROMANS: U.S. airstrikes have already hit ISIS hard in Iraq, slowing the ISIS advance in the northern part of the country.

CNN's Anna Coren live for us in Erbil, Iraq.

And those airstrikes have been, sort of unrelenting, they worked?

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Yes, they do work. That's absolutely right, Christine. They are containing ISIS. They are stopping that lightning that we saw from the militants of the past few months. So we've seen firsthand what they are doing on the battlefield. Certainly around here, Irbil, but also at Mosul dam.

You're talking about Humvees, other vehicles, the convoys that they were traveling in, blowing to pieces. And this is changing their tactics on the ground. Their modus operandi. Because they're no longer able to just roll across the desert here in Iraq the way that they were once doing. So this is really affecting their methods and also forcing them to adapt, which is alarming according to officials.

You know, they are now looking to infiltrate cities that they see as fertile ground and we visited one of those cities being Kirkuk, an oil rich city which obviously would be valuable if ISIS could get their hands on it. They can't just walk on in because there are the Kurdish forces there, defending the oil fields. Also defending the local population. But certainly from the intelligence officials that we spoke to in Kirkuk, they say they've made dozens of arrests in the past few months. And that there are sleeper cells of ISIS members actively working in Kirkuk.

We saw them changing their tactics with the car bombings over the weekend certainly in that city which were just horrific. And we have some disturbing pictures to bring to you of the victims in the hospital that were visited yesterday. You know, children, young students who were just going about their normal day, one girl, a 10- year-old, Aya (ph), who was in the car with her entire family when one of the bombs went off just meters from their vehicle.

Every single member of that family was seriously injured. Her face seriously burned. Well, her brother died just days ago. And no one wants to tell her.

This is the human face of war, Christine. This is what is happening. And while ISIS can't just walk into this town and take it over, they are certainly inflicting pain and suffering and instilling fear and panic in the local population -- Christine.

ROMANS: All right. Anna Coren, thanks for us this morning in Irbil -- Ana.

BERMAN: Breaking overnight, a homecoming for freed American hostage Peter Theo Curtis. He was reunited with his family in Boston just days after being released from Syria where he was held for nearly two years by Islamic militants.

Curtis released a statement saying, quote, "I have been so touched and moved beyond all words by the people who have come up to me today -- strangers on the airplane, the flight attendants and most of all my family to say welcome home. I'm also deeply indebted to the U.S. officials who have worked on my case. I especially want to thank the government of Qatar for intervening on my behalf."

His mother says her joy is tempered by the fact that so many others are still being held captive.

(BEGIN VIDEO CLIP)

NANCY CURTIS, MOTHER OF PETER THEO CURTIS: I don't think anybody is in the mood for celebration. You know, we're relieved. But after the events of the past week and knowing that those other children of my friends are in danger -- you know, I do have very conflicting emotions.

(END VIDEO CLIP)

BERMAN: She really does seem like a remarkable, remarkable woman. Nancy Curtis appealed for privacy for the family while her son Theo adjusts to being home.

ROMANS: Thirty-eight minutes past the hour for an EARLY START on your money. The stock market keeps climbing. Futures slightly higher again this morning. It will be the third record day in a row for stocks. The S&P 500 that's the broad benchmark that most likely the stocks in your 401(k) reflect. It closed above 2,000 for the first time ever yesterday. And this has been the best August for stocks since the year 2000.

But not all stocks are at records, though. Smith & Wesson shares, the gun maker, down about 11 percent this morning. Premarket sales last quarter fell because of shrinking demand for rifles. Gun sales have spiked in recent years fueled by concerns of more regulation. But legislation has stalled. And the buying frenzy appears to be over.

But there were a quarter after quarter of a run on guns. Some of these gun makers couldn't keep up with the demand, especially for these modern sporting rifles. But now it looks like sales finally falling. And that was a real (INAUDIBLE) trend there. So the stock down this morning.

BERMAN: Guns in the news this morning.

Tragedy at a shooting range. An instructor killed by a 9-year-old girl shooting an Uzi. How did this happen? That's right after the break.

(COMMERCIAL BREAK)

BERMAN: A tragedy to tell you about at an Arizona shooting range. An instructor was accidentally shot and killed by a 9-year-old girl who's learning how to shoot an Uzi. The video shows 39-year-old Charles Vacca with the girl just before she pulled the trigger. The automatic weapon apparently kicked back firing a bullet into Vacca.

This accident raises series questions.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: How does a 9-year-old get an Uzi in her hands?

SEAN SCARMARDO, SHOOTING RANGE MANAGER: Well, a 9-year-old gets an Uzi in her hands when -- the criteria is 8 years old to shoot firearms. We instruct kids as young as 5 and 22 rifles and they don't get to handle high firearms but they're under the supervision of their parents and of our professional range masters.

(END VIDEO CLIP)

BERMAN: Authorities say the 9-year-old is from New York. She was at the range while on vacation with her family.

ROMANS: There's a big difference between Uzi and a .22. A very big difference for such a little person to handle.

All right. Forecasters keeping a close watch on hurricanes on both U.S. coasts. Out west, it's Hurricane Marie. It's not expected to be a threat to land. But surf definitely up. And surf is definitely up. And out in the Atlantic, Hurricane Cristobal creating some dangerous rip currents. So be careful out there.

BERMAN: Indra Petersons has a look at this and our overall forecast.

Good morning, Indra.

INDRA PETERSONS, AMS METEOROLOGIST: Good morning. We have hurricanes on both coasts this morning. That's pretty impressive, but unfortunately right ahead of Labor Day weekend we do have that strong risk for rip currents. We've already heard of a death of a surfer out in the current thanks to Marie, which originally was category 5 storm. We're still talking about very large swaths of the region.

Also looking at effects. Look at all this moisture being pulled into the desert southwest. So a threat for flooding in that region today, although Marie continues to make its way offshore. So you can feel those effects miles and miles away.

We go to the eastern seaboard and we still Cristobal out there which has actually strengthened to about 80 miles per hour. So it's a category 1 hurricane today going in between the outer banks as well as Bermuda. Staying as category 1 hurricane and eventually dissipating once it hits those cooler water. Still the strong rip current risks as well. And very high surf even as high as eight feet expected on the Atlantic coastline.

Other stories, severe weather threat around Omaha today, but that frontal boundary making its way all the way even into the northeast. So we are going to see some scattered showers really from the Midwest into northwest. Keeping in mind we're going to be talking about maybe that heaviest rain around Omaha.

The bigger story will be the milder weather right before the weekend start. It's going to feel pretty good. Places like Boston are actually going to be going from almost near 90 down to about 70 degrees. About a 20-degree temperature drop. I don't know if that's good before Labor Day weekend but some people think it feels good. I mean, 70.

BERMAN: Football.

PETERSONS: I'm OK with 70.

BERMAN: It's football. It's time for football. It's time for (INAUDIBLE).

ROMANS: Oh, my goodness.

BERMAN: It is. It is. It's time for football.

PETERSONS: It's always time for summer, John.

(LAUGHTER)

BERMAN: It's time for football.

ROMANS: Let me relish the last few days of summer, please.

BERMAN: You don't have Tom Brady.

PETERSONS: Right.

BERMAN: All right. Twenty-five minutes after the hour. Let's take a look at what's coming up on "NEW DAY." Alisyn Camerota joins us.

Good morning, Alisyn.

ALISYN CAMEROTA, CNN ANCHOR, NEW DAY: Good morning, guys. Great to see you.

So coming up on "NEW DAY," we'll have the latest on the American who was killed fighting for ISIS. It races questions about how easily Americans can be recruited to join Islamic extremist and how the U.S. should deal with that threat. We'll look at who this American fighter was and we'll talk with the Pentagon and top lawmakers about what the U.S. plans to do.

Plus, we're following the latest on that alleged recording of the Michael Brown shooting. The FBI is analyzing it this morning. So how does it stack up to witness statements? Our guests will debate all of that when John, Michaela and I see you in about 14 minutes.

BERMAN: Fourteen minutes. I got get going.

Alisyn, thanks so much.

CAMEROTA: Sure.

ROMANS: All right. Happening now, an open-ended cease-fire in Gaza. Hamas and Israel agreeing to stop the violence. Will this truce last? We're live in Gaza when we come back.

(COMMERCIAL BREAK)

ROMANS: The sound of silence in Gaza, music to the ears of civilians who have had to endure seven weeks now of war. Israel and Hamas agreeing to a cease-fire, a cease-fire with no expiration date.

The announcement triggering celebrations in Gaza, including gunfire. Hamas is declaring a victory while Israeli officials are expressing concern that this truce just like the other ones might not stick.

CNN's Ian Lee live in Gaza.

No expiration date and for now this cease-fire is sticking, isn't it, Ian?

IAN LEE, CNN INTERNATIONAL CORRESPONDENT: That's right. And that's probably the biggest accomplishment of this cease-fire, is that right now guns are silent on both sides of the border. And we've seen in fast cease-fires violations that led to them collapsing. This one, though, seems like it's going to hold on at least for a while. That's because all the Palestinian factions have signed up to it. Hamas yesterday declaring it that this is a victory for the Palestinian people.

I was out in the streets talking to the people. They, too, see this as a victory. Something that they say they've been waiting for. And they point to the conditions of the cease-fire as the reason. And those include an opening of the borders to allow humanitarian aid in and easing of the blockade. As well as an extension of the fishing to six miles off the -- off the coast.

I'm here at the Rafah terminal with Egypt. This is where a lot of aid will be coming in. We do have trucks here right now. I'm told, though, that this is the typical aid. We haven't seen the implementation of these conditions of the cease-fire. While diplomats are in Cairo, they're going to hash out a more permanent piece. But really the thing that comes off most today is that people here in Gaza can start planning and thinking about the future -- Christine.

ROMANS: All right. Ian Lee for us this morning in Gaza, thank you for that.

Several aftershocks have rocked parts of northern California following Sunday's 6.0 earthquake. At least 65 aftershocks have rattled Napa County and surrounding areas. Sunday's quake injured more than 100 people. One teen survivor nearly crushed after bricks from a fireplace collapsed on him and fractured his pelvis. He is speaking out about the ordeal.

(BEGIN VIDEO CLIP)

NICHOLAS DILLON, EARTHQUAKE VICTIM: I did have moments where I start screaming because it felt like it was forever just laying on the floor. I didn't -- I didn't think the paramedics were going to come out. I was on the phone (INAUDIBLE). So my grandfather just wanted to pick me up and take me to the hospital. But they told me, no, no, leave him. And I had all of the neighbors rushing in with lights, looking at me and screaming.

(END VIDEO CLIP)

ROMANS: I sure wish him well in his recovery. Experts say the small quakes could continue now for several more days.

Records on Wall Street when we get an EARLY START on your money next.

(COMMERCIAL BREAK)

ROMANS: Breaking news this morning, IMF chief Christine Lagarde reportedly under formal investigation for negligence in a French fraud case.

We are working to confirm here at CNN.

This investigation stems from her time as the French finance minister when the state paid more than $500 million to a French businessman. He is expected of receiving favors for supporting former President Nicolas Sarkozy. Lagarde has not been charged.

Again, it's just an investigation. CNN working to confirm all the details of that.

Now more on your money this morning. This month has been the best August for stocks since 2000. The S&P 500 closed above the number 2000 for the first time yesterday. It first hit 1000 back in 1998.

Look at the stocks that have led the rally from 1000 to 2000. By far, the leader Apple, 17000 percent since 1998. Allergan, that's the maker of Botox, second, 2000 percent gain. Autozone and Ball Corp., major drivers on this big run to 2000.

Stocks climbing, do you have your investments in order? Figuring out the right mix of stocks and bonds is always tricky and there's never a better time to look than we've had a big run in the market. Here's some new guidance this morning from "CNN MONEY."

First, consider your timeline. The younger you are, the more stocks you should have in your portfolio. Subtract your age from the number 120. That means if 40 years old, your 401(k) should be roughly about 80 percent stocks, which is a lose rule of thumb.

Next diversity your investment for stocks. That means investing in the U.S. and internationally in large and in small companies. And finally, figure out your risk tolerance. CNNmoney.com has a fantastic new quiz. Brand new this morning. I'm going to tweet it out, I'll put it on Facebook. But it's really important to look at your risk tolerance to make sure you are -- you're where you should be especially after stocks have moved so much.

Fifty-eight minutes past the hour. "NEW DAY" starts right now. BERMAN: Breaking new information on the American killed while

fighting for ISIS in Syria. His family speaking out, in shock that he turned to terrorism. This as the president warns of a long campaign to wipe out that terror group.

ALISYN CAMEROTA, CNN ANCHOR: And breaking overnight. Homecoming, American Peter Theo Curtis held hostage in Syria for two years now back with his family in Boston. We have their emotional reunion.

MICHAELA PEREIRA, CNN ANCHOR: New evidence, the audiotape allegedly of the moment Michael Brown was shot. Does this new recording confirm or refute witness accounts? We break down the evidence.

BERMAN: Your NEW DAY starts right now.

ANNOUNCER: This is NEW DAY, with Chris Cuomo, Kate Bolduan and Michaela Pereira.

BERMAN: Good morning, everyone. Great to see you. Welcome to NEW DAY. It is Wednesday, August 27th. 6:00 in the East. I'm John Berman side by side with Alisyn Camerota.

CAMEROTA: That's right. Great to be you guys again.

PEREIRA: Good morning.

CAMEROTA: And, of course, Chris and Kate, have the day off.

BERMAN: Nice for them.

Up first this morning, the fight against ISIS hits home. An American, Douglas McCain, has been killed fighting in Syria for ISIS.