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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Alabama Child Hostage Drama; Violent Weather Threat; Buzz Builds on Wall Street; New MLB Steroid Scandal; Super Bowl Ready; Harbaugh Versus Harbaugh; BlackBery 10 Unveiled Today

Aired January 30, 2013 - 06:00   ET

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


JOHN BERMAN, CNN ANCHOR: A hostage standoff happening right now. A gun man storms a school bus, shoots the driver, and kidnaps a child.

ZORAIDA SAMBOLIN, CNN ANCHOR: Tornado warning near a major city. Severe storms now east of Nashville and they are on the move.

BERMAN: A baseball superstar, one of the biggest, named in connection with a major new cheating scandal. Yankees slugger Alex Rodriguez in this new report on performance enhancing drugs.

SAMBOLIN: 14,000 reasons to check your 401(k). The Dow flirts with highs not seen since before the big financial fall.

Well, good news for you this morning. Good morning to you. Welcome to EARLY START. I'm Zoraida Sambolin.

BERMAN: And I'm John Berman. It is Wednesday, January 30th. It's 6 a.m. in the East.

A lot going on this morning including happening right now, police in Alabama involved in an all-night standoff with a suspected gunman after they say he shot a school bus driver and took a child.

This is happening in Midland City. Our CNN affiliate WFXA says the bus driver is dead. Police say the suspect described as a man in his late 60s grabbed a 6-year-old boy off the bus and took him to his nearby home. They have been holed up in an underground bunker ever since.

Reporter Josh Rultenberg with CNN affiliate WHDN is live in Midland City with the latest on the standoff. Josh, what is the latest?

JOSH RULTENBERG, WHDN REPORTER (via telephone): Well, I can tell you that as of this hour, the suspect, Jimmy Lee Dikes and his 6-year-old hostage are still held in that underground bunker on Dikes' property in Dale County. Authorities say even though the child is still being held, he is physically OK.

One law enforcement official indicated that the little boy has special needs and is perhaps autistic. The FBI is now in charge of the operation, which has been going on for over 12 hours. Yesterday, this all started after Dikes allegedly boarded a Dale County school bus and demanded at least one child be taken hostage. The bus driver, although, resisted that request and we're told by witnesses that he moved to protect the kids and was shot multiple times by Dikes thereafter. Now, the bus driver has since died and since then, Dikes and his 6-year-old hostage have been held up in the underground bunker.

Dikes, in his 60s, like you said, white male, the neighbors say he had a history of mental issues. He also had a prior brush with the law. Court records indicate that Dikes was arrested in December on a menacing charge. He actually was due in court today for that charge.

And it's believed that the shootings and hostage situation is somehow connected to the upcoming court appearance. Now, again, the young victim is still held hostage, but, repeat, is OK. Authorities say this could go on for quite some time because neighbors say Dikes has been working on the bunker quite a while and we are told that he may have enough food to last him several months.

BERMAN: Terrifying and developing story in Midland City, Alabama. Josh Rultenberg with our CNN affiliate WHDN, thank you very much for that.

SAMBOLIN: It's 2 minutes past the hour. Breaking weather news now, tornado warnings across Central Tennessee and now we have just learned that there are tornado warnings in Central Kentucky as well.

Indra Petersons is tracking all of this for us. What can you tell us?

INDRA PETERSONS, AMS METEOROLOGIST: As you can see, this is definitely a very quick-moving system. We're seeing the line extending all the way from Indiana down through Louisiana, the bulk of the activity and the tornado warnings have been popping out of Middle Tennessee. Murfreesboro in fact was tornado warned about 4:30 local time and NTSU did take to Twitter to actually warn their students to take cover.

But as you can see, if I take you out, you can tell how large of an area we're really talking about dealing with the severe weather. Yes, we are spreading these warnings into Kentucky at about 1 p.m. today and we're going to see this throughout the day.

We're going to see warning after warning box start to pop up as the line of storms moves out ahead of the cold front. It's really been a major wind event. About 200 wind events reported today. Only three tornado warnings reported -- tornadoes touching down reported.

South bend, look at the rainfall totals we've been seeing so that's the other side of the system. Madison, 1.84 inches, that was a record for yesterday and for the month of January. Now let's talk about what we are going to be expecting as we through the afternoon today.

Notice the line has slowed down, we're going to see instability kick up through the afternoon and the storms should move faster, in fact, towards Atlanta as we warm up, we're going to be talking about the severe weather threat, and then as we go again towards late evening hours, we're going to be talking to mid-Atlantic region, straight down through the southeast. That threat will remain.

SAMBOLIN: All right, thank you very much, Indra.

BERMAN: All right, Wall Street getting all worked up when the trading day begins in just a few hours. The Dow and S&P 500 will be flirting with all-time highs. Stocks posted higher with the Dow settling within 50 points of the 14,000 mark. This is the Dow's highest level in five years and it's about 200 points shy of an all-time high.

The S&P 500 closed at 1508 yesterday. That is less than 60 points from a record high. So even after the European debt crisis, after the fiscal cliff, lingering concerns about unemployment, what has been stoking all of this investor optimism?

We give Christine Romans all the credit for it. She is here to break it down for us.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: No, I'm telling you the first part of this year, this has been the best start to a year since the 1990s. You've got 800 and some points of the Dow Jones Industrial average just in four weeks and you're just shy here of record highs.

Many people are saying when you look at corporate earnings if they continue to come in strongly and economic news this week continues to be strong, and the fed meeting continues to say the fed is going to prop up the economy with stimulus then you will see new highs.

Let's talk about why here. Fed stimulus is one of the things a lot of people talking about. Ben Bernanke and the fed have a fire hose, and out of that fire hose, money being spewed into the system by keeping interest rates low, that has really helped corporate profits, holding in there.

They are not hiring, but companies are making money, and investors are coming back. We have seen billions of dollars of money coming into the market from investors who are looking to get into stocks again because they are feeling more convinced about the economy.

And they are feeling more convinced about the stock market. It's easy to be convinced about the stock market after it is up 500 or 600 points. Where it goes from here is a big question. One of the reasons why investors are so convinced, housing. Home prices are coming back. It's part of the economy that is clearly recovering.

People can see it and feel it. There's a little wealth effect starting to happen again. Look at that, 5.5 percent. Home prices rose 5.5 percent in November over a year ago. Those are the year increases, haven't seen that in a long, long time.

SAMBOLIN: Love it when you come with good news. Thank you.

BERMAN: A new steroid scandal rocking Major League Baseball this morning. A published report links Yankee slugger Alex Rodriguez and other Major Leaguers to a Florida clinic that is described as the east coast version of BALCO, in other words, a haven for performance- enhancing drugs. Now A-Rod has denied any relationship with the clinic or its owner, but it's certainly worth noting that he already has a track record of lying about juicing. You recalled that A-Rod had denied he doped before finally fessing up in 2009.

Baseball says it is investigating the new allegations and we have more on the story now from CNN's John Zarrella in Miami.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The anti-aging clinic was called "Biogenesis." It was run out of this office building in Coral Gables, Florida, until two weeks ago when it shut down.

Now the vacant business is in the center of yet another saga of performance-enhancing drugs, PEDs and Major League Baseball players. A report published in "The Miami New Times" says this clinic was a pipeline to PEDs for several players.

TIM ELFRINK, "MIAMI NEW TIMES": Well, it's clear that "Biogenesis" like a lot of anti-aging clinics were selling an awful lot of HGH and a number of other drugs, you know, that are widely banned in sports, testosterone, anabolic steroids. You know, the records we've seen indicate that as for the average population, he was providing these same kinds of drugs to professional athletes.

ZARRELLA (on camera): And they are banned substances.

ELFRINK: That's correct.

ZARRELLA (voice-over): According to Major League Baseball, three players named in the article, which links to them to the clinic have already been disciplined under the league's joint drug program.

In a statement, Major League Baseball says, quote, "We are in the midst of an active investigation and are gathering and reviewing information. We will refrain from any further comment until this process is complete," end quote.

Representatives of New York Yankee Alex Rodriguez, identified in the "New Times" article, but not named as being discipline issued this outright denial. Quote, "The news reports about a purported relationship between Alex Rodriguez and Anthony Bosch are not true. Alex Rodriguez was not Mr. Bosch's patient. He was never treated by him and he was never advised by him."

Geo Gonzales, a Washington National's pitcher who was also named in the article tweeted, quote, "I have never used performance-enhancing drugs of any kind and I never will. I've never met or spoken with Tony Bosch or used any substances."

(END VIDEOTAPE)

ZARRELLA: Now the man referenced by both of those ball players, Tony Bosch is reportedly the man who ran the clinic. Now we've tried repeatedly to reach Tony Bosch, have not been able to find him or get through to him.

Now the Drug Enforcement Administration would not comment on whether it is looking into either Bosch or his company, Biogenesis. Now this is not the first time Bosch has been linked to a performance-enhancing drug story.

Back in 2009, there were reports that Bosch had a connection with then Boston Red Sox Manny Ramirez, but no charges were ever filed in that alleged investigation -- John.

BERMAN: John, there is so much history here. I got to say the first thing that I thought of when I saw A-Rod's denials about this story were the fact that A-Rod had denied using steroids before. That turned out to be a lie and it doesn't seem the Yankees are exactly leaping to his defense right now.

ZARRELLA: No, John. You know, they still owe him more, as you know, more than $100 million on his contract. He had hip surgery recently. He may miss half the season, maybe the entire season according to the general manager in New York.

So, you know, there is a lot of speculation that perhaps the relationship is souring. This certainly does not help. Now we know that back in 2007, he had this to say about whether he used performance enhancing drugs to Katie Couric.

(BEGIN VIDEO CLIP)

KATIE COURIC, TV HOST: For the record, have you ever used steroids, human growth hormone or any other performance enhancing substance?

ALEX RODRIGUEZ, NEW YORK YANKEES: No.

COURIC: Have you ever been tempted to use any of those things?

RODRIGUEZ: No.

(END VIDEO CLIP0

ZARRELLA: Now, of course, it was about a year later that a news conference was held in Tampa at spring training when A-Rod came back and said, well, you know what? I did use performance-enhancing drugs. So you are absolutely right, John. There is the long history with him and it may well be that it is all wearing very thin on Yankees manager.

BERMAN: All right, John Zarrella live for us this morning in Miami. Thanks a lot, John.

SAMBOLIN: It is 11 minutes past the hour. Super Bowl XLVII just days away now, the Baltimore Ravens and San Francisco 49ers are finally getting ready to the business of football, the zaniness that a Super Bowl media day is now behind them, but seemingly for everyone else in the Super Bowl city this week is a crazy good time.

CNN's Carlos Diaz, our eyes and ears in New Orleans, is joining us now live. So Carlos, did the Harbaugh brothers provide any billboard material at media day?

CARLOS DIAZ, CNN CORRESPONDENT: They've been providing billboard materials for each other their entire lives. I mean, these are two guys that are so committed. They are 15 months apart. So it's not like they are distant cousins.

These are two guys who grew up, forced to be best friends. You know what happens with best friends? Sometimes they want to duke it out. Check out the demeanor of these two, John Harbaugh, coach of the Ravens, more laid back than his younger brother, Jim, when they talked about how competitive they are.

(BEGIN VIDEO CLIP)

JOHN HARBAUGH, HEAD COACH, BALTIMORE RAVENS: You grow up fighting for everything. For the extra hot dog and fight for girls, you fight for everything, so we both got our girls, but we both need our victory this week.

JIM HARBAUGH, HEAD COACH, SAN FRANCISCO 49ERS: It's very exciting playing against my brother, John. The thing I also think about is the San Francisco 49ers, the players, they are my brothers.

(END VIDEO CLIP)

DIAZ: John, of course, we fought over hot dogs and girls, and Jim, the teammates are my brothers. So it's very much a dichotomy of two different personalities when you talk about the Harbaugh brothers.

SAMBOLIN: And mom saying she wants a tie.

All right, Baltimore Ravens' linebacker Ray Lewis has been accused of using a banned substance, deer antler spray, in order to speed up recovery of an injury. He was asked about this at media day. What was his response to this?

DIAZ: Yes, I got to tell you, you know, media day is a day where people are jovial and having fun. Ray Lewis was hit with some tough questions. He was asked multiple times about these allegations that he repaired his triceps quicker than usual with deer antler spray. He blew it of the first few times he was asked and then he addressed it with the third time he was asked the question.

(BEGIN VIDEO CLIP)

RAY LEWIS, BALTIMORE RAVENS: I've been in this business 17 years, and nobody has ever got up with me every morning and trained with me. Every test I have ever took in the NFL, there has never been a question if I have ever even thought about using anything. So to even entertain stupidity like that, tell him to go try to get his story off somebody else.

(END VIDEO CLIP)

DIAZ: The Baltimore Ravens are standing behind Ray Lewis saying he has never failed a drug test in any form or fashion. So they are saying that he is our guy and they are sticking with him.

SAMBOLIN: We've heard that before, right, never failed a drug test ever before. Carlos Diaz live for us, thank you. Enjoy it.

BERMAN: It's 13 minutes after the hour right now. If you have a Toyota or a Lexus in your garage, listen up. A major recall announced involving more than 1 million vehicles. Details, straight ahead.

(COMMERCIAL BREAK)

BERMAN: Just about 17 minutes past the hour. Let's talk news. Christine Romans here with the top stories.

ROMANS: And a lot of news this morning.

We begin with Wall Street flirting with all-time highs. The Dow now within reach of a milestone today, just 50 points shy of 14,000. It's about 200 points shy of, yes, an all-time high for the Dow. The S&P 500 also near a record low yesterday at 1,508, less than 60 points from its record high.

New developments in the nightclub fire in Brazil. The death toll now stands at 235 after a 21-year-old man passed away late last night. Seventy-four people remained in critical condition this morning. Investigators say the fire was caused by the band's use of a cheap flare that's intended for outdoor use.

Violent protests raging throughout the night in Egypt. Demonstrators ignoring President Mohamed Morsi's curfew orders and the political turmoil now threatening the nation's future. Egypt's army chief is warning that the clashes could reach to the total collapse of a very young government. Dozens have now died in six days protest marking two years since the fall of the last government.

All right. This morning, Toyota announcing a pair of safety recalls, listen up. It involves Toyota Corolla and Lexus IS models. More than 750,000 Corolla and Corolla Matrix vehicles being recalled because of a faulty airbag control. These vehicles were made between 2003 and 2004. And 270 Lexus models, IS models, manufactured between '06 and early '12 are being recalled because of a problem with windshield wipers.

Here you go.

SAMBOLIN: All right. Thank you, Christine.

ROMANS: You're welcome.

SAMBOLIN: Eighteen minutes past the hour. A wounded warrior who lost arms and legs after fighting in Iraq is recovering from a rare double arm transplant. Last month, 26-year-old Brendan Marrocco underwent transplant surgery at Johns Hopkins Hospital. That's in Baltimore.

Marrocco, a former Army infantryman, met with reporters yesterday to discuss how his progress is going. He describes one thing he looks forward to doing again with his brand new arms. (BEGIN VIDEO CLIP)

BRENDAN MARROCCO, IRAQ WAR VETERAN: Driving. Absolutely. Driving. I used to love to drive, and it was -- it was a lot of fun for me. So I'm really looking forward to getting back to that.

(END VDIEO CLIP)

SAMBOLIN: We are really happy for you.

That surgery took 13 hours. The medical team included 16 expert surgeons from five hospitals, all of whom donated their services to help Marrocco. Good for them.

So, coming up later on "STARTING POINT," we'll hear from two of the doctors at Johns Hopkins who helped this wounded warrior getting a new pair of arms.

BERMAN: I got to say, what an amazing attitude he has and what amazing medicine.

SAMBOLIN: Yes, really incredible.

BERMAN: Astounding to see him. Anyway, congratulations to him and the doctors.

Nineteen minutes after the hour right now. And before everyone had an iPhone or a Galaxy, they had a BlackBerry. Remember those? Well, could those days return?

SAMBOLIN: I still have one. What do you mean remember those?

BERMAN: You are old fashioned, though.

More on the company's comeback and launching today. We'll tell you all about it, coming up.

(COMMERCIAL BREAK)

SAMBOLIN: Twenty-three minutes past the hour. Welcome back to EARLY START. Christine Romans minding your business and she actually has a preview of the BlackBerry 10. It is coming out later this morning.

What can you tell us?

ROMANS: Oh, I have the old one. This isn't the new one.

(LAUGHTER)

ROMANS: But it's do or die for BlackBerry in the battle of the smartphones.

Research in Motion's BlackBerry 10, not this one, will finally be unveiled.

Here's what we think it has -- enhanced touch screen technology. Something called BlackBerry Balance. That's how you can keep your business and your personal work separate. Because this is -- a lot of companies use this phone, right? And also, a redesigned app world.

Now, RIM needs this to be successful. Its shares are up recently. You look at the far right here. It's up recently on BlackBerry 10 optimism.

But take a look at the stock over the past three years, oh! It has crumbled 76 percent during that period. Blackberry crack berry, anyone?

It's the company that addicted to us smartphones in the first place, and then it fell behind. Customers love their iPhones, and Androids came on strong because consumers want more than just work email. And BlackBerry revolutionized work email. But people want a mobile browsing, they want downloads, they want web browsing, they want to do a lot more with it. They want BlackBerry started out with.

So, Blackberry's share of the smartphone pie gets smaller by the minute. BlackBerry has 5 percent of the market -- 5 percent of the market. In 2009, you guys, it had 20 percent. Google's Android has 67 percent of the market. That's up from 4 percent in 2009. Apple's iOS, a 20 percent market share.

Dramatic changes in the cell phone industry over just the last few years. I mean, you guys have all experienced it, right?

Blackberry is hoping its new BlackBerry 10 can bring back those glory days, you guys.

BERMAN: You know, the BlackBerry 10, highly anticipated release today. A lot of people think it's the last best hope.

SAMBOLIN: I want to know what it does.

BERMAN: Well, it's getting very good reviews. A lot of people saying even if it's perfect, it may not be able to save RIM, the company that makes BlackBerry.

Romans, what's the one thing we need to know about your money?

ROMANS: One thing you got to know today, you got to know it's first day of tax season, you guys.

SAMBOLIN: Ooh!

ROMANS: You can officially submit tax returns today. Berman has been working on his feverishly. Some of you are going to have to wait, though. If you are claiming education credits, you're going to have to wait until mid-February. But today is officially the day that you can put on your green eye shades, you can sharpen your pen, or you can some text software and you can go ahead and file.

BERMAN: Do it early, that's what I would say.

(LAUGHTER) SAMBOLIN: Have you been working on it for --

BERMAN: A week. Seriously.

All right. Twenty-five minutes after the hour right now.

President Obama with a challenge for Congress -- get to work on immigration reform or he'll push his own plan. More from the president, coming right up.

(COMMERCIAL BREAK)