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CNN Live Today

Dramatic Slowdown In Job Growth For July

Aired August 06, 2004 - 11:00   ET

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

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


DARYN KAGAN, CNN ANCHOR: Iraqi's top Shiite Muslim cleric is in Britain at this hour. Grand Ayatollah al-Sistani arrived in London today to be treated for a heart condition. Al-Sistani has played an important role in Iraq since the fall of Saddam Hussein. He's the leading religious figure among the country's Shiite majority.
A homicide investigation in underway in Central Florida after several bodies were discovered in a home in Deltona, Florida. It is not known if the victims are related.

Keeping you informed, CNN, the most trusted name in news.

We are looking at 11:00 a.m. straight up on the East Coast, 8:00 a.m. on the West Coast. From CNN Center in Atlanta, good morning, once again. I'm Daryn Kagan.

Up first this hour on CNN, shrinking payrolls and growing concerns about the economic recovery. New figures out this morning showing a dramatic slowdown in job growth for July.

Our Lisa Sylvester in Washington with details on that. Lisa, good morning.

LISA SYLVESTER, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Daryn.

To say people were caught off guard by this payrolls report is an understatement. Economists have widely believed the economy was humming along and that hundreds of thousands of jobs would soon follow.

But in July, only 32,000 jobs were created. And to put that in perspective, economists were hoping to create 235,000 jobs. The unemployment rate edged down from 5.6 percent to 5.5 percent.

Taking a look at specific sectors, retail trade lost 19,000 jobs. The finance and insurance industry also took a hit, shedding 25,000 jobs.

Now, tracking the job growth in the last year, as you can see that this is the weakest job report since last December. Now also to point out here, the June jobs report was revised downward from 112,000 jobs to 78,000 jobs.

The economy and the lack of jobs are themes that have resonated on the campaign trail, but today labor secretary Elaine Chao tried to put a positive perspective on the numbers. (BEGIN VIDEO CLIP)

ELAINE CHAO, U.S. LABOR SECRETARY: We've seen nine months of growth, not consecutive, but nine months of employment growth in the construction sector in the last -- in the manufacturing sector -- in the last 12 months.

Construction continues to increase as well. Education and healthcare are some of the other sectors that continue to show great growth.

(END VIDEO CLIP)

SYLVESTER: The Federal Reserve will meet on Tuesday and it had been expected that the fed would raise the short-term interest rate a quarter percentage point. The big question now is will today's report change the fed's thinking -- Daryn?

KAGAN: Lisa Sylvester. And of course for the people out there looking for a job right now, the only job number they care about is one. They just want to find the one job.

Lisa, thank you for that.

Well, if you have -- if you've got just a paycheck you can adjust it for inflation, you are probably actually losing ground. Here is financial correspondent Ceci Rodgers on that. And she reports from Chicago.

(BEGIN VIDEOTAPE)

CECI RODGERS, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): For many Americans, take home pay is not keeping up with rising costs. Energy and gas prices are at record highs. Healthcare and medical insurance costs are soaring.

Earnings adjusted for inflation, known as real earnings, have shrunk more than 1 percent in the past year. Economists say it's worrisome.

MARK ZANDI, ECONOMY.COM: Wage growth is very slow. It's very constrained. The job market has improved, but it's still very soft. There are still many people who are unemployed, underemployed. Employers still have the upper hand in negotiations with their employees, and employees just aren't getting those pay increases.

RODGERS: Economy.com studied employment, industry-by-industry and found another disturbing trend. Fifty-five 55 percent of the new jobs created in the past year were in low wage industries such as restaurants, retailing, hotels and temporary help positions.

The question is why? Most likely, businesses still lack confidence in the economic recovery and are reluctant to bring on new employees for higher wage positions.

Not everyone agrees that stagnant wages are a problem. In fact, some economists say people are simply looking at the wrong statistics.

BRIAN WESBURY, ANALYST: When you include tips and commissions and bonuses, we see growth in wages, in earnings of about 3.7 percent in the past year, so that's faster than inflation. So it's a completely different picture.

RODGERS: Even so, in past recoveries, base wages have shown strong gains.

(on camera) No one can predict when wages will pick up. But Federal Reserve chairman, Alan Greenspan, has speculated they will as long as the economy continues to steadily grow.

Ceci Rodgers for CNN Financial News, Chicago.

(END VIDEOTAPE)

KAGAN: The jobs report and a president running for reelection, Kathleen Koch will have a report at the half hour live from the White House.

Now to the war on terror, we have learned new details in the last hour about a man arrested in Britain facing charges here in the U.S. He's accused of using a U.S.-based Web site for terrorist purposes.

Our Alina Cho is following the story. She is New Haven, Connecticut.

Alina, good morning.

ALINA CHO, CNN CORRESPONDENT: Good morning to you, Daryn.

As you mentioned, within the past hour, U.S. attorney here in New Haven, Kevin O'Connor, detailed, essentially gave a synopsis what was in this 31-page criminal complaint involving 30-year-old Babar Ahmed.

The document alleges that Ahmed operated several Web sites between the years of 1997 and 2003, some of them based right here in Connecticut, in order to commit acts of terrorism, providing material support to the Taliban and the Chechen Mujahadin.

Not just through financing, which O'Connor here characterized as significant, but the recruitment of fighters, also how to send supplies and also smuggle in fighters into Afghanistan.

The U.S. attorney, Kevin O'Connor, also talked about a floppy disk that was found with detailed drawings of a U.S. battle group plan conducting operations against al Qaeda.

(BEGIN VIDEO CLIP)

KEVIN O'Connor, U.S. ATTORNEY: Additional evidence was obtained from a floppy disk found in Mr. Ahmed's residence that set forth classified plans, then classified plans, for a U.S. naval battle group operating in the straits of Vermouth in April of 2001. In particular, the document discussed the battle group's plan movements roughly two weeks later and included a drawing of the group's formation, as well as the names of each ship therein and where they would be in that formation.

(END VIDEO CLIP)

CHO: Including the ship's vulnerability, saying that there was nothing to stop anyone from conducting a terrorist act against this through a small boat, a rocket-propelled grenade, even a missile.

A little bit about what happened today overseas. Ahmed, who is a 30-year-old British citizen of Middle Eastern descent, appeared in a London court today. He was read the formal charges against him.

When asked if he understood them, he said, not really, it's a bit confusing. He was denied bail until a hearing is held next week in London.

Ahmad was arrested last night following a raid in his home in London. This is the result of a lengthy investigation beginning in 2002, following a post-9/11 tip.

Important to note that the U.S. attorney here in New Haven, Kevin O'Connor, said that Ahmed did not act alone. But also important to note that he said there was no indication that Ahmed traveled here to the United States, especially Connecticut, in connection with this case.

In terms of getting him extradited, O'Connor said he was realistic about that. Also, when asked about this coming on the heels of several other terror arrests, including those in Britain and Albany, he said he did not want to overstate the importance of this case and that there were no active terror plots involved -- Daryn?

KAGAN: And so, the allegation is that these Web sites were used to raise money for these terroristic plans. What about the people who might have used the Web sites to actually donate money for those plans? If they are American, any charges against them?

CHO: No charges forthcoming, but of course the U.S. attorney not wanting to give a lot of details about that, Daryn, only to say that there were a significant number of U.S. citizens who had made donations to those Web sites, and this is an ongoing investigation.

KAGAN: Alina Cho in New Haven, Connecticut. Alina, thank you.

The head of an Albany, New York mosque raided in an FBI sting operation has released a statement condemning all forms of terrorism. The two men arrested in the sting are being held without bail following their arraignment yesterday.

They're accused of laundering money from a man they thought was a terrorist trying to purchase a missile launcher. On CNN's AMERICAN MORNING New York Governor George Pataki talked about the significance of the arrest. (BEGIN VIDEO CLIP)

GOV. GEORGE PATAKI (R), NEW YORK: When you're helping a terrorist to get a shoulder-fired missile that can be used to bring down airplanes or to kill an ambassador, obviously this is aimed at hurting people in the United States and subjecting us to another attack.

So in my view it was very important that people who would provide these funds, provide this material support to someone they think is a terrorist operative, is very important. And I'm pleased, if the allegations are true, that they have been charged.

(END VIDEO CLIP)

KAGAN: Officials say that mosque arrests are not linked to the heightened terror alert here in the U.S.

Federal agents are pursuing apparent new leads in the anthrax attacks today. They're searching homes in western New York state and New Jersey. At least two of the homes reportedly belong to a doctor who is said to be a terrorism expert -- a bioterrorism expert.

Neighbors report they've seen agents remove garbage bags and boxes. But authorities won't discuss what they're looking for. Five people were killed by anthrax mail to various locations in the fall of 2001.

Headlines from Iraq now, two U.S. Marines have been killed in fighting around Najaf. U.S. and Iraqi forces have been battling militias loyal to radical cleric Muqtada Al-Sadr. The U.S. estimates that it has killed 300 combatants in two days of fighting.

Clashes between U.S. troops and Al Sadr's militia have left 20 Iraqis dead in the Baghdad slum of Sadr City. The Army says that it battled men armed with machine guns and rocket propelled grenades. Even children as young as six were tossing Molotov cocktails.

And four Lebanese truck drivers are missing today in Iraq. They have not been heard from in 24 hours. Truck drivers have been a favorite target of insurgents who want foreign troops and companies out of Iraq.

Hearings today at Guantanamo Bay, Cuba may determine the validity of enemy combatant status for some detainees.

Our Sean Callebs is at the Pentagon this morning. Sean, good morning.

SEAN CALLEBS, CNN CORRESPONDENT: Good morning to you, Daryn.

Indeed, the hearings do continue today in to some of the detainees who are pleading for their freedom at Guantanamo Bay. Overall, military officials will probably hear from some 600 detainees. The hearings are actually called combatant status review tribunals. And to give you an idea exactly what goes on in these hearings, reporters had a chance to sit through a couple of them yesterday, both involving Afghan man, one 49 years old, the other 31 years old, both admittedly having ties to the Taliban.

The 49-year-old saying that he was forced to join the organization. The 31-year-old had a Taliban AK-47 and was close to a Taliban leader in that area, in one area; however, he says he had no intention on fighting Americans.

The detainees appear in orange jumpsuits. They are handcuffed. Thy are also shackled to the floor. Some activists have already been decrying the way these hearings are playing out, saying the detainees do not have access to attorneys and they also maintain that the three- person military panel already has a predetermined bias.

So far, 10 individuals have gone through these hearings. Yesterday, the 49-year-old asked when the panel would come up with a determination on his fate. The ruling would be weeks or perhaps even months down the road, Daryn.

KAGAN: So does that mean after the hearings, Sean, they go back to limbo? What happens to them?

CALLEBS: Well basically, they could probably go down two paths. If, indeed, they are found not to enemy combatants, remember that phrase, than they would be sent back to the country they came from.

However, if they are determined to have some kind of ties or be an enemy combatant, than they will go to the military commission. You may remember that phrase, too.

It's when the Bush administration decided that these enemy combatants would not go to trial, they would appear before military officials. And many of them could go down that route -- Daryn?

KAGAN: Sean Callebs at the Pentagon. Sean, thank you.

News from California, the Peterson trial is on hold, the reason, evidence that could change the direction of the case. The very latest on that story is next.

Also the woman who's at the center of the Abu Ghraib prison scandal could soon find out if she'll face a court-martial. We're going to take you live to Fort Bragg.

And later, it's a movie that some political groups are complaining about, and it's not "Fahrenheit 9/11." Just how timely is "The Manchurian Candidate" the political thriller?

Then and now coming up.

(COMMERCIAL BREAK)

MARY SNOW, CNN FINANCIAL CORRESPONDENT: I'm Mary Snow at the New York Stock Exchange where the major averages are sliding on today's surprisingly weak numbers on jobs created last month. The 32,000 jobs that were created last month were the weakest total this year and it's raising new concerns about the strength of the economic recovery going forward.

The Nasdaq composite index has dropped to its lowest level since last September. It's down more than 1 percent today and 10 percent so far this year.

The Dow industrials losing 102 points. That's on top of yesterday's 163 point slide, the second worst loss of the year.

Stay tuned, CNN'S LIVE TODAY is coming right back.

(COMMERCIAL BREAK)

KAGAN: Prosecutors have until Monday to file formal charges against the husband of a missing Utah woman. Mark Hacking is being held on suspicion of killing his wife Lori. The D.A. had until yesterday afternoon to charge Hacking, but the judge granted a extension in the case.

Hacking's lawyer tells a Salt Lake television station he'll raise the issue of mental illness and challenge his client's alleged confession.

There is a surprise development in the Scott Peterson murder trial. The trial is on hold until Tuesday because of newly discovered evidence. Peterson's attorney says scientific testing is needed on the evidence that could potentially help his client.

A source close to the case tell CNN it has to do with an item that was found near the remains of Laci Peterson and her unborn child.

The government could wrap up its case today against a female soldier accused in the Iraq prisoner abuse scandal. This is day four of the hearing for Private Lynndie England.

Our national correspondent Susan Candiotti is covering the proceeding. She is at Fort Bragg, North Carolina. Susan, good morning.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Good morning, Daryn.

And we have interesting testimony this day. Testifying that he was worried the abuse was going to start again, the whistle-blower who finally forced an investigation that broke open the Iraqi prison scandal told a military judge here why he decided to come forward.

Specialist Joseph Darby testified that he sat on a CD full of photographs for about a month, CDs given to him by a friend, Corporal Charles Graner that had photographs of detainees being abused.

Now finally, he said, he decided to turn his friends in because, "It was the morally right thing to do." And eventually this was an action that landed several of his friends at a court-martial's door.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): She appears every bit as young as she is. Cherubic faced and a 21-year-old single mother-to-be, Private First Class Lynndie England is in a world of trouble and she knows it.

Called by her own attorney, the poster child of the Abu Ghraib prison scandal because of photos like these, posing with stripped Iraqi detainees stacked in a pyramid, pointing to a row of naked prisoners, holding another detainee by a dog leash.

But now in her military court hearing, witnesses are disclosing the prison abuse was known by others and reported but not stopped. The night these pictures were taken last October, the night of the human pyramid, a guard said he told his sergeant. It went no higher and nothing happened.

The latest bombshell, testimony implicating military intelligence agents for the first time in some of the worst abuse. The November night when three suspected rapists were stacked in a twisted pile seen in this photo shot from above.

An intelligence analyst told the court two other intel agents took part in that abuse. One, he said, put his foot on the buttocks of the detainees to make them look as if they were having sex.

The analysts told a colleague who told another sergeant -- again, no action, no investigation.

RICHARD HERNANDEZ, PVT. ENGLAND'S LAWYER: What we heard today painted a clear picture of sexual abuses by others that went unpunished, inadequate training and a blatant disregard for any investigation of anything that was done.

None of these men is facing any court-martial or any punishment. Private Lynndie England is facing that punishment. None of the men are.

CANDIOTTI: England, now almost seven months pregnant with another guard's child, has looked pale, uncomfortable, even embarrassed at times while listening to lewd details of testimony.

(END VIDEOTAPE)

CANDIOTTI: Other testimony so far today detailed a troubling lack of supplies for a few months last fall at the Abu Ghraib prison. There's been testimony from guards who said that several detainees had to go nude because there weren't enough orange prison jumpsuits to go around.

In fact, the guards testified all they had to offer the detainees was women's underwear -- Daryn? KAGAN: Very uncomfortable details to listen to. I would imagine the defense would like its turn to put some witnesses on the stand. Will they have that opportunity?

CANDIOTTI: Some of the witnesses have already been called by the government. However, the defense today asked for 15 witnesses, permission to bring them to the court.

However, that will be up to the judge who is in charge here to make that decision. If they do, it's questionable about how many they might get to call and it could force the hearing into another day into the weekend.

And of course at the end, we don't know how long it will take for this military judge to make a recommendation as to whether Lynndie England should face a full court-martial -- Daryn?

KAGAN: Susan Candiotti bringing us the latest from Fort Bragg, thank you.

We concentrate on the space race just ahead. You don't often think about our neighbors to the north, our Canadians. We love the Canadians.

One group of Canadians want you to think again, or again they might say. Meet the starship Wildfire coming up next.

And later, a group of Vietnam vets go after John Kerry in a new television ad, but one well-known vet, a Republican, is coming to Kerry's defense. We'll tell you about that.

(COMMERCIAL BREAK)

KAGAN: Take a look at this. This is Canada's entry into the private space race, a manned spaceship called Wildfire. It's set for launch on October 2nd.

Twenty-six other teams from seven countries are vying to be the first to launch a spacecraft into sub orbit twice within 14 days. The winner gets $10 million.

Good luck to our friends to the north in that race.

Meanwhile, we are looking to the northeast. Talk about a sweet weekend. It does not look like early August.

ROB MARCIANO, CNN METEOROLOGIST: No.

KAGAN: It looks like Rob Marciano is here to tell us more about that.

MARCIANO: We'll start in Canada, how's that sound?

KAGAN: I like that, OK.

(WEATHER BREAK) MARCIANO: In some cases, Daryn, it might even be too cool to go to the beach, Daryn.

KAGAN: Oh, well let's not get carried away here, Rob.

MARCIANO: All right.

KAGAN: For folks at the beach, that's not good news, but right here in the Southeast, in Atlanta...

MARCIANO: Yes, it's good stuff.

KAGAN: ... we're very happy folks. Rob, thanks for that.

MARCIANO: You bet.

KAGAN: President Bush is taking a hit on the job front while John Kerry is taking a hit from a group of Vietnam vets.

Your morning's most complete political wrap-up is coming up next.

(COMMERCIAL BREAK)

KAGAN: I'm Daryn Kagan in Atlanta. Let's check what is happening now in the news. It is Friday, August 6th.

The U.S. unsealed a 30-page indictment last hour against terror suspect Babar Ahmed, a British citizen. The U.S. says that he sought to use American based Web sites to raise money for terror activities and is trying to have him extradited here to the U.S.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired August 6, 2004 - 11:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Iraqi's top Shiite Muslim cleric is in Britain at this hour. Grand Ayatollah al-Sistani arrived in London today to be treated for a heart condition. Al-Sistani has played an important role in Iraq since the fall of Saddam Hussein. He's the leading religious figure among the country's Shiite majority.
A homicide investigation in underway in Central Florida after several bodies were discovered in a home in Deltona, Florida. It is not known if the victims are related.

Keeping you informed, CNN, the most trusted name in news.

We are looking at 11:00 a.m. straight up on the East Coast, 8:00 a.m. on the West Coast. From CNN Center in Atlanta, good morning, once again. I'm Daryn Kagan.

Up first this hour on CNN, shrinking payrolls and growing concerns about the economic recovery. New figures out this morning showing a dramatic slowdown in job growth for July.

Our Lisa Sylvester in Washington with details on that. Lisa, good morning.

LISA SYLVESTER, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Daryn.

To say people were caught off guard by this payrolls report is an understatement. Economists have widely believed the economy was humming along and that hundreds of thousands of jobs would soon follow.

But in July, only 32,000 jobs were created. And to put that in perspective, economists were hoping to create 235,000 jobs. The unemployment rate edged down from 5.6 percent to 5.5 percent.

Taking a look at specific sectors, retail trade lost 19,000 jobs. The finance and insurance industry also took a hit, shedding 25,000 jobs.

Now, tracking the job growth in the last year, as you can see that this is the weakest job report since last December. Now also to point out here, the June jobs report was revised downward from 112,000 jobs to 78,000 jobs.

The economy and the lack of jobs are themes that have resonated on the campaign trail, but today labor secretary Elaine Chao tried to put a positive perspective on the numbers. (BEGIN VIDEO CLIP)

ELAINE CHAO, U.S. LABOR SECRETARY: We've seen nine months of growth, not consecutive, but nine months of employment growth in the construction sector in the last -- in the manufacturing sector -- in the last 12 months.

Construction continues to increase as well. Education and healthcare are some of the other sectors that continue to show great growth.

(END VIDEO CLIP)

SYLVESTER: The Federal Reserve will meet on Tuesday and it had been expected that the fed would raise the short-term interest rate a quarter percentage point. The big question now is will today's report change the fed's thinking -- Daryn?

KAGAN: Lisa Sylvester. And of course for the people out there looking for a job right now, the only job number they care about is one. They just want to find the one job.

Lisa, thank you for that.

Well, if you have -- if you've got just a paycheck you can adjust it for inflation, you are probably actually losing ground. Here is financial correspondent Ceci Rodgers on that. And she reports from Chicago.

(BEGIN VIDEOTAPE)

CECI RODGERS, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): For many Americans, take home pay is not keeping up with rising costs. Energy and gas prices are at record highs. Healthcare and medical insurance costs are soaring.

Earnings adjusted for inflation, known as real earnings, have shrunk more than 1 percent in the past year. Economists say it's worrisome.

MARK ZANDI, ECONOMY.COM: Wage growth is very slow. It's very constrained. The job market has improved, but it's still very soft. There are still many people who are unemployed, underemployed. Employers still have the upper hand in negotiations with their employees, and employees just aren't getting those pay increases.

RODGERS: Economy.com studied employment, industry-by-industry and found another disturbing trend. Fifty-five 55 percent of the new jobs created in the past year were in low wage industries such as restaurants, retailing, hotels and temporary help positions.

The question is why? Most likely, businesses still lack confidence in the economic recovery and are reluctant to bring on new employees for higher wage positions.

Not everyone agrees that stagnant wages are a problem. In fact, some economists say people are simply looking at the wrong statistics.

BRIAN WESBURY, ANALYST: When you include tips and commissions and bonuses, we see growth in wages, in earnings of about 3.7 percent in the past year, so that's faster than inflation. So it's a completely different picture.

RODGERS: Even so, in past recoveries, base wages have shown strong gains.

(on camera) No one can predict when wages will pick up. But Federal Reserve chairman, Alan Greenspan, has speculated they will as long as the economy continues to steadily grow.

Ceci Rodgers for CNN Financial News, Chicago.

(END VIDEOTAPE)

KAGAN: The jobs report and a president running for reelection, Kathleen Koch will have a report at the half hour live from the White House.

Now to the war on terror, we have learned new details in the last hour about a man arrested in Britain facing charges here in the U.S. He's accused of using a U.S.-based Web site for terrorist purposes.

Our Alina Cho is following the story. She is New Haven, Connecticut.

Alina, good morning.

ALINA CHO, CNN CORRESPONDENT: Good morning to you, Daryn.

As you mentioned, within the past hour, U.S. attorney here in New Haven, Kevin O'Connor, detailed, essentially gave a synopsis what was in this 31-page criminal complaint involving 30-year-old Babar Ahmed.

The document alleges that Ahmed operated several Web sites between the years of 1997 and 2003, some of them based right here in Connecticut, in order to commit acts of terrorism, providing material support to the Taliban and the Chechen Mujahadin.

Not just through financing, which O'Connor here characterized as significant, but the recruitment of fighters, also how to send supplies and also smuggle in fighters into Afghanistan.

The U.S. attorney, Kevin O'Connor, also talked about a floppy disk that was found with detailed drawings of a U.S. battle group plan conducting operations against al Qaeda.

(BEGIN VIDEO CLIP)

KEVIN O'Connor, U.S. ATTORNEY: Additional evidence was obtained from a floppy disk found in Mr. Ahmed's residence that set forth classified plans, then classified plans, for a U.S. naval battle group operating in the straits of Vermouth in April of 2001. In particular, the document discussed the battle group's plan movements roughly two weeks later and included a drawing of the group's formation, as well as the names of each ship therein and where they would be in that formation.

(END VIDEO CLIP)

CHO: Including the ship's vulnerability, saying that there was nothing to stop anyone from conducting a terrorist act against this through a small boat, a rocket-propelled grenade, even a missile.

A little bit about what happened today overseas. Ahmed, who is a 30-year-old British citizen of Middle Eastern descent, appeared in a London court today. He was read the formal charges against him.

When asked if he understood them, he said, not really, it's a bit confusing. He was denied bail until a hearing is held next week in London.

Ahmad was arrested last night following a raid in his home in London. This is the result of a lengthy investigation beginning in 2002, following a post-9/11 tip.

Important to note that the U.S. attorney here in New Haven, Kevin O'Connor, said that Ahmed did not act alone. But also important to note that he said there was no indication that Ahmed traveled here to the United States, especially Connecticut, in connection with this case.

In terms of getting him extradited, O'Connor said he was realistic about that. Also, when asked about this coming on the heels of several other terror arrests, including those in Britain and Albany, he said he did not want to overstate the importance of this case and that there were no active terror plots involved -- Daryn?

KAGAN: And so, the allegation is that these Web sites were used to raise money for these terroristic plans. What about the people who might have used the Web sites to actually donate money for those plans? If they are American, any charges against them?

CHO: No charges forthcoming, but of course the U.S. attorney not wanting to give a lot of details about that, Daryn, only to say that there were a significant number of U.S. citizens who had made donations to those Web sites, and this is an ongoing investigation.

KAGAN: Alina Cho in New Haven, Connecticut. Alina, thank you.

The head of an Albany, New York mosque raided in an FBI sting operation has released a statement condemning all forms of terrorism. The two men arrested in the sting are being held without bail following their arraignment yesterday.

They're accused of laundering money from a man they thought was a terrorist trying to purchase a missile launcher. On CNN's AMERICAN MORNING New York Governor George Pataki talked about the significance of the arrest. (BEGIN VIDEO CLIP)

GOV. GEORGE PATAKI (R), NEW YORK: When you're helping a terrorist to get a shoulder-fired missile that can be used to bring down airplanes or to kill an ambassador, obviously this is aimed at hurting people in the United States and subjecting us to another attack.

So in my view it was very important that people who would provide these funds, provide this material support to someone they think is a terrorist operative, is very important. And I'm pleased, if the allegations are true, that they have been charged.

(END VIDEO CLIP)

KAGAN: Officials say that mosque arrests are not linked to the heightened terror alert here in the U.S.

Federal agents are pursuing apparent new leads in the anthrax attacks today. They're searching homes in western New York state and New Jersey. At least two of the homes reportedly belong to a doctor who is said to be a terrorism expert -- a bioterrorism expert.

Neighbors report they've seen agents remove garbage bags and boxes. But authorities won't discuss what they're looking for. Five people were killed by anthrax mail to various locations in the fall of 2001.

Headlines from Iraq now, two U.S. Marines have been killed in fighting around Najaf. U.S. and Iraqi forces have been battling militias loyal to radical cleric Muqtada Al-Sadr. The U.S. estimates that it has killed 300 combatants in two days of fighting.

Clashes between U.S. troops and Al Sadr's militia have left 20 Iraqis dead in the Baghdad slum of Sadr City. The Army says that it battled men armed with machine guns and rocket propelled grenades. Even children as young as six were tossing Molotov cocktails.

And four Lebanese truck drivers are missing today in Iraq. They have not been heard from in 24 hours. Truck drivers have been a favorite target of insurgents who want foreign troops and companies out of Iraq.

Hearings today at Guantanamo Bay, Cuba may determine the validity of enemy combatant status for some detainees.

Our Sean Callebs is at the Pentagon this morning. Sean, good morning.

SEAN CALLEBS, CNN CORRESPONDENT: Good morning to you, Daryn.

Indeed, the hearings do continue today in to some of the detainees who are pleading for their freedom at Guantanamo Bay. Overall, military officials will probably hear from some 600 detainees. The hearings are actually called combatant status review tribunals. And to give you an idea exactly what goes on in these hearings, reporters had a chance to sit through a couple of them yesterday, both involving Afghan man, one 49 years old, the other 31 years old, both admittedly having ties to the Taliban.

The 49-year-old saying that he was forced to join the organization. The 31-year-old had a Taliban AK-47 and was close to a Taliban leader in that area, in one area; however, he says he had no intention on fighting Americans.

The detainees appear in orange jumpsuits. They are handcuffed. Thy are also shackled to the floor. Some activists have already been decrying the way these hearings are playing out, saying the detainees do not have access to attorneys and they also maintain that the three- person military panel already has a predetermined bias.

So far, 10 individuals have gone through these hearings. Yesterday, the 49-year-old asked when the panel would come up with a determination on his fate. The ruling would be weeks or perhaps even months down the road, Daryn.

KAGAN: So does that mean after the hearings, Sean, they go back to limbo? What happens to them?

CALLEBS: Well basically, they could probably go down two paths. If, indeed, they are found not to enemy combatants, remember that phrase, than they would be sent back to the country they came from.

However, if they are determined to have some kind of ties or be an enemy combatant, than they will go to the military commission. You may remember that phrase, too.

It's when the Bush administration decided that these enemy combatants would not go to trial, they would appear before military officials. And many of them could go down that route -- Daryn?

KAGAN: Sean Callebs at the Pentagon. Sean, thank you.

News from California, the Peterson trial is on hold, the reason, evidence that could change the direction of the case. The very latest on that story is next.

Also the woman who's at the center of the Abu Ghraib prison scandal could soon find out if she'll face a court-martial. We're going to take you live to Fort Bragg.

And later, it's a movie that some political groups are complaining about, and it's not "Fahrenheit 9/11." Just how timely is "The Manchurian Candidate" the political thriller?

Then and now coming up.

(COMMERCIAL BREAK)

MARY SNOW, CNN FINANCIAL CORRESPONDENT: I'm Mary Snow at the New York Stock Exchange where the major averages are sliding on today's surprisingly weak numbers on jobs created last month. The 32,000 jobs that were created last month were the weakest total this year and it's raising new concerns about the strength of the economic recovery going forward.

The Nasdaq composite index has dropped to its lowest level since last September. It's down more than 1 percent today and 10 percent so far this year.

The Dow industrials losing 102 points. That's on top of yesterday's 163 point slide, the second worst loss of the year.

Stay tuned, CNN'S LIVE TODAY is coming right back.

(COMMERCIAL BREAK)

KAGAN: Prosecutors have until Monday to file formal charges against the husband of a missing Utah woman. Mark Hacking is being held on suspicion of killing his wife Lori. The D.A. had until yesterday afternoon to charge Hacking, but the judge granted a extension in the case.

Hacking's lawyer tells a Salt Lake television station he'll raise the issue of mental illness and challenge his client's alleged confession.

There is a surprise development in the Scott Peterson murder trial. The trial is on hold until Tuesday because of newly discovered evidence. Peterson's attorney says scientific testing is needed on the evidence that could potentially help his client.

A source close to the case tell CNN it has to do with an item that was found near the remains of Laci Peterson and her unborn child.

The government could wrap up its case today against a female soldier accused in the Iraq prisoner abuse scandal. This is day four of the hearing for Private Lynndie England.

Our national correspondent Susan Candiotti is covering the proceeding. She is at Fort Bragg, North Carolina. Susan, good morning.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Good morning, Daryn.

And we have interesting testimony this day. Testifying that he was worried the abuse was going to start again, the whistle-blower who finally forced an investigation that broke open the Iraqi prison scandal told a military judge here why he decided to come forward.

Specialist Joseph Darby testified that he sat on a CD full of photographs for about a month, CDs given to him by a friend, Corporal Charles Graner that had photographs of detainees being abused.

Now finally, he said, he decided to turn his friends in because, "It was the morally right thing to do." And eventually this was an action that landed several of his friends at a court-martial's door.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): She appears every bit as young as she is. Cherubic faced and a 21-year-old single mother-to-be, Private First Class Lynndie England is in a world of trouble and she knows it.

Called by her own attorney, the poster child of the Abu Ghraib prison scandal because of photos like these, posing with stripped Iraqi detainees stacked in a pyramid, pointing to a row of naked prisoners, holding another detainee by a dog leash.

But now in her military court hearing, witnesses are disclosing the prison abuse was known by others and reported but not stopped. The night these pictures were taken last October, the night of the human pyramid, a guard said he told his sergeant. It went no higher and nothing happened.

The latest bombshell, testimony implicating military intelligence agents for the first time in some of the worst abuse. The November night when three suspected rapists were stacked in a twisted pile seen in this photo shot from above.

An intelligence analyst told the court two other intel agents took part in that abuse. One, he said, put his foot on the buttocks of the detainees to make them look as if they were having sex.

The analysts told a colleague who told another sergeant -- again, no action, no investigation.

RICHARD HERNANDEZ, PVT. ENGLAND'S LAWYER: What we heard today painted a clear picture of sexual abuses by others that went unpunished, inadequate training and a blatant disregard for any investigation of anything that was done.

None of these men is facing any court-martial or any punishment. Private Lynndie England is facing that punishment. None of the men are.

CANDIOTTI: England, now almost seven months pregnant with another guard's child, has looked pale, uncomfortable, even embarrassed at times while listening to lewd details of testimony.

(END VIDEOTAPE)

CANDIOTTI: Other testimony so far today detailed a troubling lack of supplies for a few months last fall at the Abu Ghraib prison. There's been testimony from guards who said that several detainees had to go nude because there weren't enough orange prison jumpsuits to go around.

In fact, the guards testified all they had to offer the detainees was women's underwear -- Daryn? KAGAN: Very uncomfortable details to listen to. I would imagine the defense would like its turn to put some witnesses on the stand. Will they have that opportunity?

CANDIOTTI: Some of the witnesses have already been called by the government. However, the defense today asked for 15 witnesses, permission to bring them to the court.

However, that will be up to the judge who is in charge here to make that decision. If they do, it's questionable about how many they might get to call and it could force the hearing into another day into the weekend.

And of course at the end, we don't know how long it will take for this military judge to make a recommendation as to whether Lynndie England should face a full court-martial -- Daryn?

KAGAN: Susan Candiotti bringing us the latest from Fort Bragg, thank you.

We concentrate on the space race just ahead. You don't often think about our neighbors to the north, our Canadians. We love the Canadians.

One group of Canadians want you to think again, or again they might say. Meet the starship Wildfire coming up next.

And later, a group of Vietnam vets go after John Kerry in a new television ad, but one well-known vet, a Republican, is coming to Kerry's defense. We'll tell you about that.

(COMMERCIAL BREAK)

KAGAN: Take a look at this. This is Canada's entry into the private space race, a manned spaceship called Wildfire. It's set for launch on October 2nd.

Twenty-six other teams from seven countries are vying to be the first to launch a spacecraft into sub orbit twice within 14 days. The winner gets $10 million.

Good luck to our friends to the north in that race.

Meanwhile, we are looking to the northeast. Talk about a sweet weekend. It does not look like early August.

ROB MARCIANO, CNN METEOROLOGIST: No.

KAGAN: It looks like Rob Marciano is here to tell us more about that.

MARCIANO: We'll start in Canada, how's that sound?

KAGAN: I like that, OK.

(WEATHER BREAK) MARCIANO: In some cases, Daryn, it might even be too cool to go to the beach, Daryn.

KAGAN: Oh, well let's not get carried away here, Rob.

MARCIANO: All right.

KAGAN: For folks at the beach, that's not good news, but right here in the Southeast, in Atlanta...

MARCIANO: Yes, it's good stuff.

KAGAN: ... we're very happy folks. Rob, thanks for that.

MARCIANO: You bet.

KAGAN: President Bush is taking a hit on the job front while John Kerry is taking a hit from a group of Vietnam vets.

Your morning's most complete political wrap-up is coming up next.

(COMMERCIAL BREAK)

KAGAN: I'm Daryn Kagan in Atlanta. Let's check what is happening now in the news. It is Friday, August 6th.

The U.S. unsealed a 30-page indictment last hour against terror suspect Babar Ahmed, a British citizen. The U.S. says that he sought to use American based Web sites to raise money for terror activities and is trying to have him extradited here to the U.S.

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