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American Morning

Are Insurgents Back in Iraq?; Another Losing Day on Wall Street

Aired April 21, 2005 - 07:00   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.


BILL HEMMER, CNN ANCHOR: Good morning. Are the insurgents back in Iraq? More deadly car bombs. Reports of some 50 bodies found in a river and more in a nearby soccer stadium? Could it signal a much wider conflict?
Also, what caused a fire that left six dead, five of them children?

And another losing day on Wall Street. Stocks now at their lowest point since the election. What's behind this slide? On AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING, with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everybody. Good to have you along with us today. I'm Bill Hemmer. Soledad is off today

CAROL COSTELLO, CNN ANCHOR: She is vacationing for a short time. I'm Carol Costello.

HEMMER: Good morning to you, Carol.

Looking at this case with Zacarias Moussaoui, charged in the 9/11 attacks. After all this time, he's expected to plead guilty and possibly accept the death penalty, but apparently it's not that easy. Deborah Feyerick walk takes us through that case in a moment.

COSTELLO: No, apparently he changes his mind a lot.

HEMMER: That's happened.

COSTELLO: Also Republicans are offering to investigate House Majority Tom DeLay, after spending so much political capital defending him. We'll ask political analyst Ron Brownstein why.

HEMMER: That's from D.C.

And Jack's talking about D.C., too. Good morning, Jack.

JACK CAFFERTY, CNN ANCHOR: Forty-eight percent of Americans think our economy is getting worse, according to a "Washington Post"/ABC News poll, and it ain't just the stock market. We're going to take a look at all of the signs that 48 percent of the country might be right, and then we're going to take a look at what Congress is doing to help us. It won't take long. HEMMER: Thank you, Jack.

Let's start this morning in Iraq. Just in this morning, U.S. military sources say a commercial military helicopter was shot down in Iraq. All nine people onboard believed to be dead. This the latest incident of a wave of violence that hit that country.

Also a roadside bomb in Baghdad kills at least two people today, hitting a small convoy traveling to the airport there.

Meanwhile, a grisly discovery of some 50 bodies in the Tigris River, south of Baghdad. The president, Jalal Talabani, says the dead may be Shiites who were reportedly taken from southern Iraq. Iraqi officials have photos of what appear to be bodies pulled from a river. All this while now as the prime minister, Ayad Allawi, escapes and assassination attack late on Wednesday.

"Newsweek" reporter Owen Matthews is live from Baghdad for us today.

And there is an awful lot to get through, Owen. Thanks for your time. And let's first of all talk about these bodies from the river. There seems to be confusion surrounding this incident. What can we report today about this?

OWEN MATTHEWS, "NEWSWEEK": Yes, I think you're absolutely right about confusion. In fact, I think the confusion really tells us more about the state of Iraq -- as much about the state of Iraq as the actual bodies themselves. It seems there were at least 50, maybe as high as 60, bodies pulled from the river, and it seems they were pulled out over the course of several days, if not weeks. However, we don't yet have confirmation they were all massacred at one time by Sunni insurgents, as some Shia politicians were suggesting early last week.

HEMMER: Owen, I think the first answer there goes to this issue here, and there's some videotape out there and some pictures out there. Why is this so hard to verify a day later?

MATTHEWS: I think just because the security situation is so chaotic that we have the world's press corps in Baghdad. We have the Iraqi government for a week now trying to verify an incident which allegedly happened last weekend, and we still don't know, and I think that really tells us a lot about the complete disconnect between the alleged downturn in insurgent activity that we're hearing from some officials sources, especially on the U.S. side, and the reality on the ground, which is that the insurgency is very much still very much in business.

HEMMER: There's been an implication that this story could have been made up. Who benefits if that is true?

MATTHEWS: Well, in fact, the problem with the story is everyone is all too willing to believe it. It's the ethnic cleansing, Bosnia style, Sunni-on-Shia violence nightmare that everyone fears will bring the whole house of cards of Iraq crashing down. So what everyone fears is there will be some major ethnic clash between Sunnis and Shias, and massacres are going to be triggered all across the country. That's the nightmare scenario, and that's why this story hit such a raw nerve especially among Shiite parliamentarians. They were afraid that this was the Sunnis resuming a repression, or what they perceive a repression, which has gone on for two generations.

HEMMER: There was also an assassination attempt against Ayad Allawi. How close was this to killing him?

MATTHEWS: I believe that several policemen in his (INAUDIBLE), two of them were killed and several of them were injured. My understanding was that his (INAUDIBLE) had actually passed the bomb site when it went off. In other wards he escaped by the skin of his teeth. He just a few hundred yards away when it went off. That's my understanding.

HEMMER: Also this story in western Iraq, 20 Iraqi soldiers found dead in a soccer stadium. What do you know about that?

MATTHEWS: It seems to be a repeat of something that we've -- a horrible situation that we've seen several times, is insurgents kidnapping and murdering off-duty Iraqi policemen and Iraqi soldiers. In this case, it seems to be Iraqi soldiers who were on their way to see their family in civilian clothes in a bus. They were taken prisoner at gunpoint, herded into a stadium, and just brutally murdered. It just seems to be part of the insurgent attempt to undermine the Iraqi security forces, which the U.S. is trying so hard to stamp out right now.

HEMMER: Owen, if you put all this together, is there an indication the insurgents are stronger than before? Are they back in business, or did they simply never go away?

MATTHEWS: I think, to an extent, they never went away. I think it's true that the elections and the success of those elections was a real body blow to them. However, I think it's equally clear there's still a large enough segment of that insurgency, and we don't know whether it's extreme Islamic fundamentalism segment of the insurgency, we don't whether it's the former Baathist segment of the insurgency. But suddenly, enough of them are still in business to cause major, major disruption. And that's something the new government is going to have to address.

HEMMER: Yes, I want to thank you. Owen Matthews, thanks, "Newsweek" reporter there in Baghdad.

COSTELLO: He has the only person charged in connection with the 9/11 attacks in the United States. Now federal officials say Zacarias Moussaoui will admit he was part of Al Qaeda's master plan to strike America, unless he changes his mind.

More now from CNN's Deborah Feyerick.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): 9/11 terror suspect, Zacarias Moussaoui says he's not crazy. His lawyers aren't convinced. Now, a federal judge has decided it, siding with Moussaoui, saying he is fully competent to plead guilty to charges against him.

ANDREW MCBRIDE, FORMER FEDERAL PROSECUTOR: At the end of the day, in the American legal system, the defendant, not his or her lawyers, makes the final decision to plead guilty.

FEYERICK: Moussaoui's change of heart to plead guilty and accept the death penalty without any sort of a deal is a complete turnaround.

RICHARD DIETER, DEATH PENALTY INFORMATION CTR.: He can plead guilty to the crime, and even ask for the death penalty, but the federal government still has the obligation to prove beyond a reasonable doubt to a jury if it's called, unanimously, that the death penalty is warranted. So that's not totally on his shoulders or for his call, although pleading guilty is.

FEYERICK: Moussaoui was arrested one month before 9/11. He was indicted soon after. And has since maintained he had nothing to do with those attacks, claiming he was part of another similar plot.

For the last two years, he's been fighting to get testimony from captured al Qaeda leaders he says that clear him of 9/11 ties. But government officials said, no access, citing national security. His trial stalled two years. Last month, a supreme court refused to consider any details in Moussaoui's case.

In an unusual move, the judge and the accused terror suspect met together in a Virginia courthouse early Wednesday. The judge questioning Moussaoui to see if he really wanted to plead guilty this time, unlike the summer of 2002 when he changed his mind.

Says former federal prosecutor Andrew McBride...

MCBRIDE: From his unique perspective, pleading guilty and accepting responsibility may in his view be an act of honor as an al Qaeda member who is proud to be an al Qaeda member.

FEYERICK (on camera): Moussaoui is making this move against the advice of his own lawyers. He rarely speaks to them, and at one point even told the judge he thought his lawyers were trying to kill him. But those lawyers feel that if this case were to go to trial, Moussaoui could avoid the death penalty.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

COSTELLO: We should know what happens fairly soon. Moussaoui is expected to enter his guilty plea on Friday in federal court in Virginia. Of course we'll keep you posted -- Bill.

HEMMER: From Washington, Capital Hill, Carol, House lawmakers getting ready to OK an $8 billion energy bill. Among other things, that measure would allow drilling in the Alaska Wildlife Refuge. The House has given the go-ahead for drilling there twice in the past four years only to see the same issue die in the Senate every time.

Stocks, meanwhile, took a stumble Wednesday, including a steep decline that includes the Dow 30 now dropping 500 points in six days. It closed yesterday just above 10,000, falling 115 points. The Nasdaq ending trading yesterday at 1,913, off about 18 points. And here to tell us why is Andy Serwer.

The freefall is under way. That's A bit of an overstatement.

ANDY SERWER, "FORTUNE" MAGAZINE: Well, it's a been a dramatic decline since early March, Bill; since March 7th we're down basically a thousand points on the Dow. It touched over 11,000 on that day. We're down close to 10,000.

The immediate cause, I think, is inflation, and higher oil prices, and those two are very connected obviously. Even with the price of oil down a little bit, it's still historically high. And we're seeing signs -- there we see yesterday's numbers, the Dow down 115 points. And we're seeing signs of inflations, particularly yesterday's report creeping into another segments of the economy, prices in stores, airline tickets as well, and then there's the concern that the Federal Reserve is going to be fighting that by rising interest rates, and rising interest rates would serve to slow down growth in the economy. And I think those are the approximate causes, and those are really concerns of economists and people on the street.

HEMMER: Just two months ago, we were talking about Dow 11,000, and the possibilities if it keeps going up the way it did. March was a very tough month. We're three weeks into April. Can April now match March on the negative side?

SERWER: Well, I think really kind of a prisoner of oil prices at this point. And if oil continues to decline a little bit, I think we're going to see a bit of response. This morning, futures are looking good; eBay and some other companies reporting positive earnings. But right now, the outlook on Wall Street and the economy I think you'd have to say is a bit shaky.

HEMMER: All right, back to this in a couple of minutes, with Jack, too.

Thank you, Andy -- Carol.

SERWER: Indeed.

COSTELLO: Landmark legislation in Connecticut. The state has become the first in the United States to legalize civil unions through legislation rather than court order. Governor Jodi Rell signed the bill on Wednesday that becomes law October 1st. While gay couples still won't receive a marriage license, Rell says it gives them many of the same rights and privileges of marriage.

(BEGIN VIDEO CLIP)

GOV. JODI RELL (R), CONNECTICUT: I have said all along that I believe in no discrimination of any kind, and I think that this bill accomplishes that, while at the same time, preserving the traditional language that a marriage is between a man and woman.

(END VIDEO CLIP)

COSTELLO: Supporters say the legislation is historic, because it was voluntarily passed, rather than won through court battles, such as the laws in Vermont and Massachusetts.

(WEATHER REPORT)

HEMMER: Speedy election, conclave? Stunned a lot of people. In a moment here, we are learning more about what happened behind the scenes, including how Pope John Paul II may have helped to quicken that vote. Intriguing. We'll get to it.

COSTELLO: Also a thrill ride proves a little too thrilling for a teenager and her 11-year-old cousin. High winds helped trap them 900 feet above Las Vegas. Scary. Why did it take more than one hour to rescue them.

HEMMER: Also this morning, get out of the way, elephants loose on city streets, and on a rampage. We'll tell you where this happened in a moment here, when we continue after this on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Authorities now saying that five children are among the six dead in a mobile home fire. It happened in Humphrey, Arkansas, a small town, just 40 miles southeast of Little Rock. Police are saying the dead include five young boys from three different families, ranging in age from eight months to three years old.

KTHV's Melissa Dunbar is in Humphrey, Arkansas.

Melissa, how did this happen there?

Good morning.

MELISSA DUNBAR, KTHV REPORTER: Good morning.

A devastating morning in Arkansas county as the sun is just beginning to rise. Authorities still do not know what caused this fire. State police will be on the scene in about an hour to pick through the charred remains. You can see behind me just the shell, just the skeleton, of what is left of this mobile home. The sheriff says five of the young bodies were found in the front bedroom. The sixth body, that of an infant, was found further back into the mobile home in what they're calling a living room.

The coroner who pulled bodies from this fire says this the worst crime scene he has ever been to. Firefighters say the mobile home was fully engulfed when they arrived on the scene. We are told several people tried to save the victims, but the fire was just too intense. The parents of two of the children killed believe the 23-year-old woman who was babysitting the kids did everything she could to try to get them out safely.

(BEGIN VIDEO CLIP)

RACHEL WHITESIDE, VICTIMS' MOTHER: If there is any young parents out there, love every minute, every second with your child.

JOHN WHITESIDE, VICTIMS' FATHER: You tell them every time you get a chance, I love you.

RACHEL WHITESIDE: Every day, I love you.

Because in seconds they're gone, just like that.

JOHN WHITESIDE: The last words my oldest son said to me, "I love you more, daddy."

RACHEL WHITESIDE: I love you more, daddy. I love you more.

(END VIDEO CLIP)

DUNBAR: John and Rachel Whiteside lost their only two children in this fire. They say the woman who was babysitting them also lost her two children in this fire. Police have still not released any of the names. They do tell us the first person on the scene was a teenage boy who saw the flames. He ran over to see if there was anyone inside. He heard the children screaming, and he attempted to get them out, but the fire was already out of control.

Back to you, Bill.

HEMMER: What an absolute tragedy. You figure at that young, too, they did not stand a chance inside.

Melissa Dunbar in Humphrey, Arkansas -- Carol.

COSTELLO: Out in Los Vegas, a wild and scary ride for two cousins. The two ages 11 and 19, were stranded on a thrill ride for more than an hour, 900 feet above the Las Vegas strip. Take a look there. That's the stratosphere. It's at a hotel casino. It owns the ride. It blames the 55-miles-an-hour winds for triggering a safety mechanism designed to stop the ride in high winds. Nobody was hurt, but one girl says she feels very lucky this morning.

(BEGIN VIDEO CLIP)

ERICKA MCKINNON, STUCK ON THRILL RIDE: I didn't think I was going to make it. To tell you the truth, I'm never getting on a roller coaster again.

(END VIDEO CLIP)

COSTELLO: I'm with you.

In the next hour, we'll talk to those two girls about their experience.

HEMMER: First time for one of them, hey? Only 900 feet. Only one hour.

COSTELLO: Oh, come on, if you're scared of heights in any way.

HEMMER: Put this camera on Carol. Thank you.

COSTELLO: I would be so scared.

HEMMER: We'll talk to them next hour.

Elephants on the loose in South Korea. Watch this, pachyderms smashing through a window, charging into the restaurants. As the folks there sitting down to eat went off in a panic. The rampage sent one restaurant worker fleeing. I bet. Another waitress said she hid in the closet. One woman was injured. She got hit with a trunk. In all, six elephants broke free from a nearby amusement park. Police say all three were recaptured there.

How about that?

COSTELLO: That is so strange. Just sounded funny, one woman got hit by a trunk.

HEMMER: You want fries with that?

COSTELLO: Stop it.

All right, moving along now, one drug company rolls out a new discount plan for prescriptions. But is it aimed more at politician than patients. A closer look, just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Double shot of Andy Serwer. Wall Street taken by surprise. A big announcement from the stock exchange yesterday. And Andy's back with us, "Minding Your Business now."

What happened?

SERWER: Well, it's a historic deal. The New York Stock Exchange is going to be merging with an electronic exchange called Archipelago, and then going public, which means you could actually invest in the New York Stock Exchange when this whole deal is done. This is all about competing with Nasdaq, getting faster, getting electronic. And what it really means is that the specialist, which has been one of the great jobs on Wall Street, it's just a moneymaking machine on Wall Street, eventually could go by the bye. That will be many probably years probably hence.

What are the implications for investors? Well, probably not a whole lot right off the bat, but eventually we're going to see faster trading, better pricing and lower costs. And of course that's at all good stuff. Still has to be sorted out. John Thain, the head of the New York Stock Exchange, will be head of the merge company. I think it'll really interesting to actually invest in the New York Stock Exchange itself as a public company. I mean, that's kind of a novel concept that people are going to have a tough time getting their minds around.

HEMMER: You mentioned the Nasdaq, too. How much competition is there between these two exchanges?

SERWER: Well, there's a huge competition between them. And they compete to see which companies will be on the list on their exchanges, and the more fluid an exchange is, that's the advantage that would go to a company. So if the NYSE has faster, better trading, that looks better to a company wanting to list there.

HEMMER: The technology, too. Got to be fast.

SERWER: Yes.

HEMMER: Thanks, Andy.

SERWER: You're welcome.

HEMMER: Double shot in 20 minutes, though. I like this.

SERWER: We'll, we're going to have a triple shot if you watch the whole hour. That's probably too much, though.

COSTELLO: Back to Jack and the Question of the Day.

CAFFERTY: Note to the United States Congress: Inflation, interest rates are rising, stock prices are plunging, gas prices are causing sticker shock, wages have fallen behind the cost of living and deficits are out of control.

"The Washington Post" has an interesting front-page story this morning about Congress and its preoccupation with the death of Terri Schiavo, the ethics of House leader Tom DeLay and the fate of the Senate filibuster. The only economic bill signed into law this year are restrictions on class-action lawsuits and rewrite of the nation's bankruptcy laws.

According to the latest "Washington Post"/ABC News poll, only 14 percent of Americans think our economy is getting better, while 48 percent think it's getting worse.

Here's the question, what should Congress be doing about the economy? AM@cnn.com is the address.

COSTELLO: Interesting.

SERWER: And that consumer confidence thing is what you're really talking about in a way, Jack, that people aren't confident about the economy is important stuff, because people make decisions based on how good they feel about the future.

CAFFERTY: Very true.

COSTELLO: It will best interesting to hear what people have to say this morning about that because of what Congress is currently working on. HEMMER: We'll see. Thanks, guys.

New details emerging from the closed doors of the papal conclave. One move that could have backfired on the eventual pope actually helped him get elected. Now that's ahead in a moment here, right after this.

(COMMERCIAL BREAK)

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Aired April 21, 2005 - 07:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Good morning. Are the insurgents back in Iraq? More deadly car bombs. Reports of some 50 bodies found in a river and more in a nearby soccer stadium? Could it signal a much wider conflict?
Also, what caused a fire that left six dead, five of them children?

And another losing day on Wall Street. Stocks now at their lowest point since the election. What's behind this slide? On AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING, with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everybody. Good to have you along with us today. I'm Bill Hemmer. Soledad is off today

CAROL COSTELLO, CNN ANCHOR: She is vacationing for a short time. I'm Carol Costello.

HEMMER: Good morning to you, Carol.

Looking at this case with Zacarias Moussaoui, charged in the 9/11 attacks. After all this time, he's expected to plead guilty and possibly accept the death penalty, but apparently it's not that easy. Deborah Feyerick walk takes us through that case in a moment.

COSTELLO: No, apparently he changes his mind a lot.

HEMMER: That's happened.

COSTELLO: Also Republicans are offering to investigate House Majority Tom DeLay, after spending so much political capital defending him. We'll ask political analyst Ron Brownstein why.

HEMMER: That's from D.C.

And Jack's talking about D.C., too. Good morning, Jack.

JACK CAFFERTY, CNN ANCHOR: Forty-eight percent of Americans think our economy is getting worse, according to a "Washington Post"/ABC News poll, and it ain't just the stock market. We're going to take a look at all of the signs that 48 percent of the country might be right, and then we're going to take a look at what Congress is doing to help us. It won't take long. HEMMER: Thank you, Jack.

Let's start this morning in Iraq. Just in this morning, U.S. military sources say a commercial military helicopter was shot down in Iraq. All nine people onboard believed to be dead. This the latest incident of a wave of violence that hit that country.

Also a roadside bomb in Baghdad kills at least two people today, hitting a small convoy traveling to the airport there.

Meanwhile, a grisly discovery of some 50 bodies in the Tigris River, south of Baghdad. The president, Jalal Talabani, says the dead may be Shiites who were reportedly taken from southern Iraq. Iraqi officials have photos of what appear to be bodies pulled from a river. All this while now as the prime minister, Ayad Allawi, escapes and assassination attack late on Wednesday.

"Newsweek" reporter Owen Matthews is live from Baghdad for us today.

And there is an awful lot to get through, Owen. Thanks for your time. And let's first of all talk about these bodies from the river. There seems to be confusion surrounding this incident. What can we report today about this?

OWEN MATTHEWS, "NEWSWEEK": Yes, I think you're absolutely right about confusion. In fact, I think the confusion really tells us more about the state of Iraq -- as much about the state of Iraq as the actual bodies themselves. It seems there were at least 50, maybe as high as 60, bodies pulled from the river, and it seems they were pulled out over the course of several days, if not weeks. However, we don't yet have confirmation they were all massacred at one time by Sunni insurgents, as some Shia politicians were suggesting early last week.

HEMMER: Owen, I think the first answer there goes to this issue here, and there's some videotape out there and some pictures out there. Why is this so hard to verify a day later?

MATTHEWS: I think just because the security situation is so chaotic that we have the world's press corps in Baghdad. We have the Iraqi government for a week now trying to verify an incident which allegedly happened last weekend, and we still don't know, and I think that really tells us a lot about the complete disconnect between the alleged downturn in insurgent activity that we're hearing from some officials sources, especially on the U.S. side, and the reality on the ground, which is that the insurgency is very much still very much in business.

HEMMER: There's been an implication that this story could have been made up. Who benefits if that is true?

MATTHEWS: Well, in fact, the problem with the story is everyone is all too willing to believe it. It's the ethnic cleansing, Bosnia style, Sunni-on-Shia violence nightmare that everyone fears will bring the whole house of cards of Iraq crashing down. So what everyone fears is there will be some major ethnic clash between Sunnis and Shias, and massacres are going to be triggered all across the country. That's the nightmare scenario, and that's why this story hit such a raw nerve especially among Shiite parliamentarians. They were afraid that this was the Sunnis resuming a repression, or what they perceive a repression, which has gone on for two generations.

HEMMER: There was also an assassination attempt against Ayad Allawi. How close was this to killing him?

MATTHEWS: I believe that several policemen in his (INAUDIBLE), two of them were killed and several of them were injured. My understanding was that his (INAUDIBLE) had actually passed the bomb site when it went off. In other wards he escaped by the skin of his teeth. He just a few hundred yards away when it went off. That's my understanding.

HEMMER: Also this story in western Iraq, 20 Iraqi soldiers found dead in a soccer stadium. What do you know about that?

MATTHEWS: It seems to be a repeat of something that we've -- a horrible situation that we've seen several times, is insurgents kidnapping and murdering off-duty Iraqi policemen and Iraqi soldiers. In this case, it seems to be Iraqi soldiers who were on their way to see their family in civilian clothes in a bus. They were taken prisoner at gunpoint, herded into a stadium, and just brutally murdered. It just seems to be part of the insurgent attempt to undermine the Iraqi security forces, which the U.S. is trying so hard to stamp out right now.

HEMMER: Owen, if you put all this together, is there an indication the insurgents are stronger than before? Are they back in business, or did they simply never go away?

MATTHEWS: I think, to an extent, they never went away. I think it's true that the elections and the success of those elections was a real body blow to them. However, I think it's equally clear there's still a large enough segment of that insurgency, and we don't know whether it's extreme Islamic fundamentalism segment of the insurgency, we don't whether it's the former Baathist segment of the insurgency. But suddenly, enough of them are still in business to cause major, major disruption. And that's something the new government is going to have to address.

HEMMER: Yes, I want to thank you. Owen Matthews, thanks, "Newsweek" reporter there in Baghdad.

COSTELLO: He has the only person charged in connection with the 9/11 attacks in the United States. Now federal officials say Zacarias Moussaoui will admit he was part of Al Qaeda's master plan to strike America, unless he changes his mind.

More now from CNN's Deborah Feyerick.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): 9/11 terror suspect, Zacarias Moussaoui says he's not crazy. His lawyers aren't convinced. Now, a federal judge has decided it, siding with Moussaoui, saying he is fully competent to plead guilty to charges against him.

ANDREW MCBRIDE, FORMER FEDERAL PROSECUTOR: At the end of the day, in the American legal system, the defendant, not his or her lawyers, makes the final decision to plead guilty.

FEYERICK: Moussaoui's change of heart to plead guilty and accept the death penalty without any sort of a deal is a complete turnaround.

RICHARD DIETER, DEATH PENALTY INFORMATION CTR.: He can plead guilty to the crime, and even ask for the death penalty, but the federal government still has the obligation to prove beyond a reasonable doubt to a jury if it's called, unanimously, that the death penalty is warranted. So that's not totally on his shoulders or for his call, although pleading guilty is.

FEYERICK: Moussaoui was arrested one month before 9/11. He was indicted soon after. And has since maintained he had nothing to do with those attacks, claiming he was part of another similar plot.

For the last two years, he's been fighting to get testimony from captured al Qaeda leaders he says that clear him of 9/11 ties. But government officials said, no access, citing national security. His trial stalled two years. Last month, a supreme court refused to consider any details in Moussaoui's case.

In an unusual move, the judge and the accused terror suspect met together in a Virginia courthouse early Wednesday. The judge questioning Moussaoui to see if he really wanted to plead guilty this time, unlike the summer of 2002 when he changed his mind.

Says former federal prosecutor Andrew McBride...

MCBRIDE: From his unique perspective, pleading guilty and accepting responsibility may in his view be an act of honor as an al Qaeda member who is proud to be an al Qaeda member.

FEYERICK (on camera): Moussaoui is making this move against the advice of his own lawyers. He rarely speaks to them, and at one point even told the judge he thought his lawyers were trying to kill him. But those lawyers feel that if this case were to go to trial, Moussaoui could avoid the death penalty.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

COSTELLO: We should know what happens fairly soon. Moussaoui is expected to enter his guilty plea on Friday in federal court in Virginia. Of course we'll keep you posted -- Bill.

HEMMER: From Washington, Capital Hill, Carol, House lawmakers getting ready to OK an $8 billion energy bill. Among other things, that measure would allow drilling in the Alaska Wildlife Refuge. The House has given the go-ahead for drilling there twice in the past four years only to see the same issue die in the Senate every time.

Stocks, meanwhile, took a stumble Wednesday, including a steep decline that includes the Dow 30 now dropping 500 points in six days. It closed yesterday just above 10,000, falling 115 points. The Nasdaq ending trading yesterday at 1,913, off about 18 points. And here to tell us why is Andy Serwer.

The freefall is under way. That's A bit of an overstatement.

ANDY SERWER, "FORTUNE" MAGAZINE: Well, it's a been a dramatic decline since early March, Bill; since March 7th we're down basically a thousand points on the Dow. It touched over 11,000 on that day. We're down close to 10,000.

The immediate cause, I think, is inflation, and higher oil prices, and those two are very connected obviously. Even with the price of oil down a little bit, it's still historically high. And we're seeing signs -- there we see yesterday's numbers, the Dow down 115 points. And we're seeing signs of inflations, particularly yesterday's report creeping into another segments of the economy, prices in stores, airline tickets as well, and then there's the concern that the Federal Reserve is going to be fighting that by rising interest rates, and rising interest rates would serve to slow down growth in the economy. And I think those are the approximate causes, and those are really concerns of economists and people on the street.

HEMMER: Just two months ago, we were talking about Dow 11,000, and the possibilities if it keeps going up the way it did. March was a very tough month. We're three weeks into April. Can April now match March on the negative side?

SERWER: Well, I think really kind of a prisoner of oil prices at this point. And if oil continues to decline a little bit, I think we're going to see a bit of response. This morning, futures are looking good; eBay and some other companies reporting positive earnings. But right now, the outlook on Wall Street and the economy I think you'd have to say is a bit shaky.

HEMMER: All right, back to this in a couple of minutes, with Jack, too.

Thank you, Andy -- Carol.

SERWER: Indeed.

COSTELLO: Landmark legislation in Connecticut. The state has become the first in the United States to legalize civil unions through legislation rather than court order. Governor Jodi Rell signed the bill on Wednesday that becomes law October 1st. While gay couples still won't receive a marriage license, Rell says it gives them many of the same rights and privileges of marriage.

(BEGIN VIDEO CLIP)

GOV. JODI RELL (R), CONNECTICUT: I have said all along that I believe in no discrimination of any kind, and I think that this bill accomplishes that, while at the same time, preserving the traditional language that a marriage is between a man and woman.

(END VIDEO CLIP)

COSTELLO: Supporters say the legislation is historic, because it was voluntarily passed, rather than won through court battles, such as the laws in Vermont and Massachusetts.

(WEATHER REPORT)

HEMMER: Speedy election, conclave? Stunned a lot of people. In a moment here, we are learning more about what happened behind the scenes, including how Pope John Paul II may have helped to quicken that vote. Intriguing. We'll get to it.

COSTELLO: Also a thrill ride proves a little too thrilling for a teenager and her 11-year-old cousin. High winds helped trap them 900 feet above Las Vegas. Scary. Why did it take more than one hour to rescue them.

HEMMER: Also this morning, get out of the way, elephants loose on city streets, and on a rampage. We'll tell you where this happened in a moment here, when we continue after this on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Authorities now saying that five children are among the six dead in a mobile home fire. It happened in Humphrey, Arkansas, a small town, just 40 miles southeast of Little Rock. Police are saying the dead include five young boys from three different families, ranging in age from eight months to three years old.

KTHV's Melissa Dunbar is in Humphrey, Arkansas.

Melissa, how did this happen there?

Good morning.

MELISSA DUNBAR, KTHV REPORTER: Good morning.

A devastating morning in Arkansas county as the sun is just beginning to rise. Authorities still do not know what caused this fire. State police will be on the scene in about an hour to pick through the charred remains. You can see behind me just the shell, just the skeleton, of what is left of this mobile home. The sheriff says five of the young bodies were found in the front bedroom. The sixth body, that of an infant, was found further back into the mobile home in what they're calling a living room.

The coroner who pulled bodies from this fire says this the worst crime scene he has ever been to. Firefighters say the mobile home was fully engulfed when they arrived on the scene. We are told several people tried to save the victims, but the fire was just too intense. The parents of two of the children killed believe the 23-year-old woman who was babysitting the kids did everything she could to try to get them out safely.

(BEGIN VIDEO CLIP)

RACHEL WHITESIDE, VICTIMS' MOTHER: If there is any young parents out there, love every minute, every second with your child.

JOHN WHITESIDE, VICTIMS' FATHER: You tell them every time you get a chance, I love you.

RACHEL WHITESIDE: Every day, I love you.

Because in seconds they're gone, just like that.

JOHN WHITESIDE: The last words my oldest son said to me, "I love you more, daddy."

RACHEL WHITESIDE: I love you more, daddy. I love you more.

(END VIDEO CLIP)

DUNBAR: John and Rachel Whiteside lost their only two children in this fire. They say the woman who was babysitting them also lost her two children in this fire. Police have still not released any of the names. They do tell us the first person on the scene was a teenage boy who saw the flames. He ran over to see if there was anyone inside. He heard the children screaming, and he attempted to get them out, but the fire was already out of control.

Back to you, Bill.

HEMMER: What an absolute tragedy. You figure at that young, too, they did not stand a chance inside.

Melissa Dunbar in Humphrey, Arkansas -- Carol.

COSTELLO: Out in Los Vegas, a wild and scary ride for two cousins. The two ages 11 and 19, were stranded on a thrill ride for more than an hour, 900 feet above the Las Vegas strip. Take a look there. That's the stratosphere. It's at a hotel casino. It owns the ride. It blames the 55-miles-an-hour winds for triggering a safety mechanism designed to stop the ride in high winds. Nobody was hurt, but one girl says she feels very lucky this morning.

(BEGIN VIDEO CLIP)

ERICKA MCKINNON, STUCK ON THRILL RIDE: I didn't think I was going to make it. To tell you the truth, I'm never getting on a roller coaster again.

(END VIDEO CLIP)

COSTELLO: I'm with you.

In the next hour, we'll talk to those two girls about their experience.

HEMMER: First time for one of them, hey? Only 900 feet. Only one hour.

COSTELLO: Oh, come on, if you're scared of heights in any way.

HEMMER: Put this camera on Carol. Thank you.

COSTELLO: I would be so scared.

HEMMER: We'll talk to them next hour.

Elephants on the loose in South Korea. Watch this, pachyderms smashing through a window, charging into the restaurants. As the folks there sitting down to eat went off in a panic. The rampage sent one restaurant worker fleeing. I bet. Another waitress said she hid in the closet. One woman was injured. She got hit with a trunk. In all, six elephants broke free from a nearby amusement park. Police say all three were recaptured there.

How about that?

COSTELLO: That is so strange. Just sounded funny, one woman got hit by a trunk.

HEMMER: You want fries with that?

COSTELLO: Stop it.

All right, moving along now, one drug company rolls out a new discount plan for prescriptions. But is it aimed more at politician than patients. A closer look, just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Double shot of Andy Serwer. Wall Street taken by surprise. A big announcement from the stock exchange yesterday. And Andy's back with us, "Minding Your Business now."

What happened?

SERWER: Well, it's a historic deal. The New York Stock Exchange is going to be merging with an electronic exchange called Archipelago, and then going public, which means you could actually invest in the New York Stock Exchange when this whole deal is done. This is all about competing with Nasdaq, getting faster, getting electronic. And what it really means is that the specialist, which has been one of the great jobs on Wall Street, it's just a moneymaking machine on Wall Street, eventually could go by the bye. That will be many probably years probably hence.

What are the implications for investors? Well, probably not a whole lot right off the bat, but eventually we're going to see faster trading, better pricing and lower costs. And of course that's at all good stuff. Still has to be sorted out. John Thain, the head of the New York Stock Exchange, will be head of the merge company. I think it'll really interesting to actually invest in the New York Stock Exchange itself as a public company. I mean, that's kind of a novel concept that people are going to have a tough time getting their minds around.

HEMMER: You mentioned the Nasdaq, too. How much competition is there between these two exchanges?

SERWER: Well, there's a huge competition between them. And they compete to see which companies will be on the list on their exchanges, and the more fluid an exchange is, that's the advantage that would go to a company. So if the NYSE has faster, better trading, that looks better to a company wanting to list there.

HEMMER: The technology, too. Got to be fast.

SERWER: Yes.

HEMMER: Thanks, Andy.

SERWER: You're welcome.

HEMMER: Double shot in 20 minutes, though. I like this.

SERWER: We'll, we're going to have a triple shot if you watch the whole hour. That's probably too much, though.

COSTELLO: Back to Jack and the Question of the Day.

CAFFERTY: Note to the United States Congress: Inflation, interest rates are rising, stock prices are plunging, gas prices are causing sticker shock, wages have fallen behind the cost of living and deficits are out of control.

"The Washington Post" has an interesting front-page story this morning about Congress and its preoccupation with the death of Terri Schiavo, the ethics of House leader Tom DeLay and the fate of the Senate filibuster. The only economic bill signed into law this year are restrictions on class-action lawsuits and rewrite of the nation's bankruptcy laws.

According to the latest "Washington Post"/ABC News poll, only 14 percent of Americans think our economy is getting better, while 48 percent think it's getting worse.

Here's the question, what should Congress be doing about the economy? AM@cnn.com is the address.

COSTELLO: Interesting.

SERWER: And that consumer confidence thing is what you're really talking about in a way, Jack, that people aren't confident about the economy is important stuff, because people make decisions based on how good they feel about the future.

CAFFERTY: Very true.

COSTELLO: It will best interesting to hear what people have to say this morning about that because of what Congress is currently working on. HEMMER: We'll see. Thanks, guys.

New details emerging from the closed doors of the papal conclave. One move that could have backfired on the eventual pope actually helped him get elected. Now that's ahead in a moment here, right after this.

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