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Dow Flirts with 14,000; Molotov Cocktails Thrown at Cairo Palace; Killer Mistakenly Set Free; Update on Pilot Who Passed Out; Compromise on Contraception Coverage; Hillary Clinton Says Goodbye

Aired February 1, 2013 - 14:00   ET

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


BROOKE BALDWIN, CNN ANCHOR: During this show, we'll find out if the Dow closes at an all-time high. But, it may not mean a thing for our economy.

I'm Brooke Baldwin. The news is now.

A prosecutor gunned down in a parking lot. And now, a warning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I hope that the people that did this are watching. We're going to find you. We're going to pull you out of whatever hole you're in, and we're going to bring you back.

(END VIDEO CLIP)

BALDWIN: Plus, live during this hour, you will see Hillary Clinton say good-bye in her last moments as America's top diplomat.

And, Super Bowl bets. Will Alicia Keys get booed? Will Jay-Z join his wife at halftime? In Vegas, it is all up for grabs.

Here we go. Top of the hour. Happy Friday to you. I'm Brooke Baldwin.

And something is happening today that hasn't happened in more than five years. It is great news for a lot of you, of course, saving for retirement or to save a child for college, for example. The stock market is soaring to levels we really haven't seen since 2007, which is all the way back there. Right, the downs and the ups and the downs back again.

Checking out the big board with me. It's been a huge day. At this moment, two hours away from the closing bell, we are above that 14,000 mark at 14,012. Keep in mind, that big high, that was October 9th, if I'm correct, 2007, the big high was 14,164. So we're close and we're watching it.

Alison Kosik live for me on the floor of the New York Stock Exchange.

Alison, it's a great day. It could be an even better day. What do you think our chances are of actually, you know, hitting that record? Surpassing the record?

ALISON KOSIK, CNN CORRESPONDENT: Hitting the record of 14,164 and even surpassing it today, I don't think that's going to happen. But at the very least, you probably will see the Dow close at 14,000 or maybe even a little bit above. And it really was -- it really was this jobs report that is sort of juicing stocks. It showed that 157,000 jobs were added to the economy in January.

But not just the jobs report. We also got a positive consumer confidence report, a positive manufacturing report, showing positive numbers for the month of January. So that positive momentum was already there and it just took the jobs report to kind of push the Dow over the edge.

Brooke.

BALDWIN: So we're talking so much about the Dow Jones. But I just think -- we thought it was important to talk S&P 500 as well.

KOSIK: Right.

BALDWIN: And we have a chart I just want to show here because, you know, this really is the basis for many index funds we regular folks invest in, right? So, again, the ups and the downs in the S&P as well, approaching record territory too. So what's behind the big recovery, you think?

KOSIK: You know, when you look at the Dow, when you look at the S&P 500, the fact of the matter is, parts of the economy are improving. You know, it's maybe not consistent, but we are seeing parts.

The biggest factor, though, that's driving the market higher, especially the S&P, once again, and the Dow is the Fed. The Fed is pumping $85 billion every single month into the economy, buying up mortgage backed securities and bonds. Basically lowering interest rates, making it so investors feel like they have nowhere to go to really make some money. So they're putting their money into stocks.

So a lot of this is about the Fed. But then you talk to one economist who says it's even more than that. Listen to what he had to say.

(BEGIN VIDEO CLIP)

PROF. JEREMY SIEGEL, WHARTON SCHOOL, UNIVERSITY OF PENNSYLVANIA: We are at an all time high in earnings. So on the basis of earnings, which is the most important determinant of stock prices, I think we're fully justified. In terms of the economy, certainly we're not back to where we were in 2007. Unemployment was 4 percent or 5 percent then. But it does mean that investors are optimistic and are looking towards an improving economy in 2013.

(END VIDEO CLIP)

KOSIK: And evidence of that, Brooke, is just the fourth quarter earnings season. The last three months of last year. Fourth quarter earnings have come out pretty good. You look at Apple the past week, Exxon Mobil, they reported record-breaking profits. So, you know, when you talk about why the market is as high as it is, it really depends on who you ask as to how important it is. And the real deciding factor, Brooke, is going to come in March when Congress is expected to take up the issue of spending cuts again. That could turn things around. You could see the market do a 180 and start going the other way.

Brooke.

BALDWIN: Right. Sequestration. We'll see how the numbers respond, of course.

KOSIK: Yes.

BALDWIN: Certainly they will.

Alison Kosik for me in New York. Appreciate it.

Now want to take you to Cairo. I want you to take a look at this scene. This is just outside of the presidential palace. Thousands of opponents of the president, of Mohamed Morsi, they are hurling -- you saw the smoke there -- rushing, Molotov cocktails, setting off fireworks at the outer wall of his palace compound. At one point, a fire began burning at the entrance. Look at this.

Police have retaliated. They have fired water cannons, tossing tear gas at these crowds that are growing larger and larger. I want to go straight to Cairo to our senior international correspondent, Ben Wedeman, who's there for us. And Jim Clancy, walk on in, because I want you to be part of this discussion as well here for me here. So, Jim Clancy and Ben Wedeman.

Ben, first to you, because, you know, I think two years ago there you were, we were talking about those protest toppling Hosni Mubarak. Flash forward two years. Thousands of people furious with the current president. What do they want?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think really it's a fundamental split between his opponents and his followers. They're divided over, for instance, the constitution that was pushed through by Mohamed Morsi, written up and approved by more or less members of -- supporters of his political party, the freedom and justice party. And most of these people you're seeing out there don't see really a political resolution to this crisis. They want to see Mohamed Morsi out of power. They want to see the Muslim Brotherhood, of which he's a member, pushed out of power. They feel that it's an organization that has an 80-year history of operating in the shadows with a secret agenda.

Here in Cairo, in Alexandria, the cities along the Suez Canal and cities in the delta as well, we're seeing large demonstrations. And, of course, in Cairo, becoming quite violent. This really does seem to be shaking the foundations of the government of Mohamed Morsi, who's come out and said that the security forces will act decisively to put down and protect the government institutions. He's blaming the opposition for allowing these demonstrations to happen.

But what appears fairly apparent is that he doesn't seem to have much control over what's going on in the streets of Cairo and other Egyptian cities.

Brooke.

BALDWIN: Ben, stand by for me.

Jim Clancy, my question to you is, what has the Muslim Brotherhood, what has President Morsi said so far? I mean you hear Ben talking about the people want them out. They elected him.

JIM CLANCY, CNN INTERNATIONAL: Well, a majority of them elected them and some of them are very angry and they regret that election. I think what President Morsi may have done right is to pull his own supporters off the streets, to prevent things from getting any worse.

BALDWIN: Members of the Muslim Brotherhood not on the streets.

CLANCY: To prevent them from getting any worse. He's also reached out to other politicians and said, well, why don't you pull your people back too? But there's a sense perhaps by Mr. Morsi that somehow he can manage this. And it doesn't look like he can manage it at all. The question is whether the street is ruling Egypt today.

BALDWIN: Ben Wedeman, do you agree with Clancy here, that -- where does this go next?

WEDEMAN: Well, I think tonight may be critical. We've heard the Muslim Brotherhood saying they're not going to send their supporters out into the street. And so far it has not occurred. It did occur back in December when there were demonstrations also outside of that presidential palace where there were bloody clashes between supporters and opponents of the Muslim Brotherhood.

If those supporters of the brotherhood don't go out into the streets, and do practice some restraint, then a real escalation of the situation here could be avoided. But what we're seeing is, you know, this sort of really harsh language coming from the opponents of the brotherhood. There doesn't seem to be anything on the street. And it's important to emphasize on the street, as opposed to what politicians are saying. There doesn't seem to be any willingness to compromise, to somehow live through three more years of a Muslim Brotherhood-led government. They want that government out now.

And another important thing to stress, Brooke, is that what I've seen is that the people who are clashing, throwing rocks at the police and fighting with them, they don't listen to the politicians. They feel they've been marginalized and really have no role in Egyptian politics today.

BALDWIN: It's incredible to think two years ago we were seeing fireworks of such a different kind.

Ben Wedeman for me in Cairo. Jim Clancy here in Atlanta. Thank you, both, gentlemen, very much.

In Illinois and in Indiana today, a frantic search is underway for a convicted killer. But we're not talking about some elaborate escape here. Oh, no. You see this guy. This is a dangerous murder who was accidentally released. His name is Steven Robbins. He was taken to court in Chicago on some minor drug charges. The charges were dropped. But after the hearing, instead of being returned to this Indiana prison to continue serving his 60-year sentence for murder, Cook County officials let him walk free. CNN's Ted Rowlands is in Chicago, just outside that Cook County jail.

Ted, how does this happen?

TED ROWLANDS, CNN CORRESPONDENT: Well, there are a lot of questions, Brooke, as to how it happened. Talking to Indiana prison officials, they say that Steven Robbins, when he left their custody, he had with him paperwork. It was very clear the "do not let this prisoner go."

And that is exactly what happened. He was led outside the main gates here, outside the jail, on Wednesday night, after a very short hearing, and it makes you think why he was even here in the first place. He apparently tried to deal with this 21-year-old issue of an old warrant for him by mail, from prison, where he's, as you said, serving a 60-year prison term. He filed the paperwork, but it was returned and denied because it didn't have a $5 filing fee.

BALDWIN: Wow.

ROWLANDS: So, instead, Cook County went to Indiana, picked him up, drove him back here. He was in court for a matter of minutes. And then he was just let go. So, right now there is a manhunt on for him and there are a lot of questions for the folks here at Cook County.

Unbelievably, Brooke, this happened in 2009. Same scenario. Prisoner from Mississippi came up for an unrelated charge. He was serving a manslaughter term. They let him go. That prisoner turned himself in. The hope here is that Mr. Stevens does the same.

BALDWIN: Stunning. Ted Rowlands. Thank you, Ted.

Just into me. Doctors are now revealing why a pilot passed out midflight. Stick around for this one.

Plus, an about-face involving Obamacare. Remember when religious groups were up in arms over a contraception mandate? We talked so much about that. Suddenly now a compromise. How this impacts you, next.

(COMMERCIAL BREAK)

BALDWIN: Just in to me here at CNN, we're learning why an Alaskan Airlines pilot passed out midflight. The plane was taking off from Los Angeles last night. I want to go to Rene Marsh in Washington.

Rene, before we get to what doctors are saying about this, give me the back story.

RENE MARSH, CNN CORRESPONDENT: Well, that's right. You know, this is -- imagine being on this plane, so scary to hear the details here. So the flight was midair. That is when this pilot essentially passed out. There were some 116 people on that plane. There were also five crew members as well.

Again, that plane now, because the pilot passed out, had to make an emergency landing at Portland International Airport in Oregon. At that point, when that pilot passed out, we understand that the co-pilot had to take over the controls. This co-pilot has been with Alaska Airlines for some 11 years now. So he took over the controls.

Meantime, passengers who were on that plane said that they saw attendants running up the aisles. They ran quickly to the cockpit. And then another passenger said, when the cockpit door opened, they witnessed the crew members laying that pilot down on the ground and they started to treat the pilot. Luckily, there was a doctor who happened to be on board of that plane. We will fast-forward and let you know that that plane did land safely.

So what happened here? What happened to this pilot? Well, we did speak to Alaska Airlines and they say that doctors believe that the pilot either had food poisoning or it was the flu virus that caused him to pass out. But at this hour, Alaska Airlines saying that the pilot is doing better.

Back to you.

BALDWIN: OK. Rene Marsh. Thank you, Rene.

It was one of the most controversial aspects of the president's health care reform, forcing all employers, whatever their beliefs, to offer contraception coverage. Well, now the Obama administration is offering religious groups a way out. It's a compromise that still allows workers of religious organizations to get birth control. Senior medical correspondent Elizabeth Cohen here with me now.

So a compromise announced today. How's this supposed to work?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: It's a compromise that's aimed at putting as much distance as possible between these employers. These religious nonprofits who don't like birth control, who are against it, and the actual birth control itself. Because, as you said, their employees, some of them really want their health insurance to cover birth control.

BALDWIN: Right.

COHEN: So here are the main points of what they're going to do or what the proposal is, I should say.

BALDWIN: OK.

COHEN: Women will get free birth control under this compromise, under this plan. These employees will get free birth control. Insurance companies will pay for it. And the birth control will be offered as a separate benefit from the employees' regular health insurance that they get from the place where they work.

So the reason why that last part is important, that it's a separate benefit, again, is that it puts as much distance as possible between the employer, who doesn't like birth control, and the birth control.

BALDWIN: Sure. So even though there's the distance, I imagine religious organizations are -- have something to say about this today.

COHEN: I imagine they will. The U.S. Conference of Bishops, this (INAUDIBLE) organization, they have been very vocal on this, but today put out a press release saying, hey, we've got to read this. It gets extremely complicated. It depends if you're a self-insured company and not a self-insured company. I mean it gets very, very complicated.

BALDWIN: And as you pointed out, insurance companies footing the bill. How are they feeling about that?

COHEN: Well, two parts of that. One, insurance companies know that when you give a woman birth control, you end up saving a lot of money in the end, right? You're not paying for her pregnancy. You're not paying for the birth. You're not paying to take care of that child, once that child is born. So they know they'll save money.

Another thing is that, in some cases, insurance companies have to -- that have to pay fees to the federal government for Obamacare, they won't have to pay some of those fees.

BALDWIN: They won't.

COHEN: Right. So -- and that's where it gets kind of complicated. So insurance companies, they haven't put out their official statement yet, but they definitely -- they're financially taken care of to a great degree in this plan.

BALDWIN: OK. Thank you very much.

COHEN: Thanks.

BALDWIN: We are just now hearing, Secretary of State Hillary Clinton has just turned in her resignation. And any minute now she is expected to say good-bye, one last time. We'll show it to you live.

(COMMERCIAL BREAK)

BALDWIN: Some of the hottest stories in a flash. "Rapid Fire." Roll it.

Any minute now, we will carry this for you live, Hillary Clinton's good-bye. But first, also leaving the Obama administration today, Energy Secretary Steven Chu. He says he will stay on until late February or maybe a little beyond that. Chu was a leading advocate for alternative energy development. But his critics blame him for the handling of Solyndra. Remember that? The failed clean energy firm that cost taxpayers a half billion dollars. Chu says he would like to return to teaching and to research.

Superstorm Sandy left New York littered with enough debris to fill the Empire State Building three times over. But now more than 95 percent of that debris has been removed. At least that's what we're getting according to FEMA. Homeowners, neighbors, volunteers pitched in to help these workers remove the debris in 95 days. And just this week, as we have reported, Congress approved $51 billion in disaster relief for the victims.

A terse response from Senator Robert Menendez to allegations he partied with prostitutes during trips to the Caribbean. Reporters caught up with the New Jersey Democrat after an event last night, asked him if he had violated campaign finance laws on the trips. Here was his response.

(BEGIN VIDEO CLIP)

REPORTER: Any comments, senator?

SEN. ROBERT MENENDEZ (D), NEW JERSEY: I have comments I've already put through my office, These are nameless, faceless, anonymous allegations. You should find out who that is.

(END VIDEO CLIP)

BALDWIN: Menendez released a statement earlier calling the allegations false and the work of a right wing blog, he said. The allegations were first reported by the online publication "The Daily Caller."

What does Kmart need with 10 pounds of marijuana? Yes, it doesn't need that. But a package full of pot arrived to one of its stores in Seattle this week. The package originated in Los Angeles, never made it to its destination in Philadelphia. The Seattle Kmart was listed as the return address.

And a huge stash. I am talking hundreds. Look at this. Never before seen pictures of the Beatles has been found. Take a look. Fab Four meeting with their guru and others. Folks, these are behind the scenes pictures from when the band was shooting the film "Help" in the Bahamas. How did we get these? A photographer recently found his negatives for the photos and decided to publish them.

And again, we are hearing Secretary of State Hillary Clinton has just turned in her resignation. Any minute, take a look at the live pictures, she is expected to say good-bye one final time. Stay right here. We'll take it live on CNN.

(COMMERCIAL BREAK)

JAKE TAPPER, CNN ANCHOR: Hi, I'm Jake Tapper, live in Washington, where any minute Secretary of State Hillary Clinton will say good-bye to the department she's led for the past four years. Clinton, expected to address State Department employees, for the very last time.

And it comes hours after a terrorist attack on the U.S. embassy in Turkey. A suicide bomber, who was reportedly associated with a radical leftist group, killed a Turkish security guard in broad daylight.

After Clinton leaves today, former Senator John Kerry, Democrat of Massachusetts, will take the oath to become President Obama's second secretary of state.

I am sitting here, of course, with John King and Gloria Borger.

John, you have been covering soon to be former Secretary of State Hillary Clinton for more than two decades. Do you think, are you convinced that this is truly farewell?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: No. No. I think this is closing a chapter. I don't think it's the last chapter. So the big question is, is the next chapter running for president? Many think yes. She says she'll think about that down the road. She's not going to worry about it at all.

And I actually take her at her word. She says she wants to be what it's like -- feel what it's like to not be tired. She wants to spend some time with Chelsea.

But, Jake, I think she is, on this day we should remember, she is the living, breathing sort of example of the ark of women in politics in power. The good, all the progress that has been made, and sometimes the rough and tumble. When she was first lady of Arkansas, she wanted to be Hillary Rodham Clinton. That caused a huge --

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: She still is, John, according to the signature on the resignation letter.

KING: Yes, on the resignation -- yes, on the -- she's back at Hillary Rodham Clinton.

BORGER: Right.

KING: She hasn't -- and a lot of --

TAPPER: That's interesting. Can we show that? I don't know if we can show that letter, her resignation letter, or I hereby resign as the secretary of state.

BORGER: Yes.

KING: Can we get that up?

TAPPER: And she signed it Hillary Rodham Clinton --

BORGER: Rodham Clinton, right.

TAPPER: Which is a signature we haven't actually seen much in the last four years.

BORGER: No.

KING: She had to almost take it back and apologize -- not apologize, but explain to the people of Arkansas. This was south. It was the first time you had -- you know, it was a working spouse. Never mind now she's the most powerful woman in American history, probably. But at that point just having -- he was the governor and she was working with the Children's Defense Fund doing other things with her law degree and it was -- it was controversial at the time. Imagine that, that we're talk about -- that's 20 years ago, 1990s. Now you're -- in 1992, I was at an event in Chicago where she caused a huge stir when she said, well I suppose I could have stayed home and baked cookies and had teas, but I decided to fulfill my profession.

BORGER: She didn't do it.

KING: That angered a lot of housewives.

TAPPER: Gloria, one of the things that I think a lot of pundits in Washington predicted when President Obama, or then President-elect Obama, tapped then Senator Hillary Clinton to become the secretary of state, is that there would be leaks coming from her State Department.

BORGER: Oh, yes.

TAPPER: That there would be -- just, this would be a tension-filled relationship.

BORGER: Yes, Hatfields and the McCoys.

TAPPER: On "60 Minutes" the other day, it was a love fest.

BORGER: Right. You know, I think this is a testament really to Hillary Clinton. I mean they were the Hatfields and the McCoys. That's -- it's true.

TAPPER: There was real animosity between them.

BORGER: The -- hated each other. Animosity. Hard fought campaign. The two were not close. And it was down to the wire.

Then he picks her first among rivals to become his secretary of state. I wasn't sure she was going to do it, but she did. And once she did, the word went down, you've got to be loyal to this president, and so even though the staffs are still not close, by the way, you don't see a lot of leaks coming out of the State Department saying, you know, the White House really mishandled Libya or Afghanistan. That hasn't occurred. And I think that's one of the reasons the president is so grateful to her, because she's been such a team player.

TAPPER: We hear cheers and we see Secretary of State Hillary Clinton walking through the crowd as she prepares to say good-bye to her employees at the State Department and her last day as secretary of state. Former Massachusetts Senator John Kerry will, of course, take her place and be sworn in after Secretary Clinton bids farewell. She has submitted her resignation letter to President Obama. And any minute we're expecting her to make her remarks.