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AROUND THE WORLD

Dow Roars To Record High; N. Korea Threatens To End Armistice; Menendez Accuser Recants Claims; Interview with David Martosko; Interview with Tennis Player Sloane Stephens

Aired March 5, 2013 - 12:00   ET

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


ASHLEIGH BANFIELD, CNN ANCHOR: And thank you, everyone, for watching. AROUND THE WORLD is next.

BRIANNA KEILAR, CNN ANCHOR: Welcome to AROUND THE WORLD. I'm Brianna Keilar in for Suzanne Malveaux and Michael Holmes.

We begin in New York. Have a look at this number. That is the Dow Jones right now. It hit an all-time high this morning, passing the previous high almost right out of the gate when the opening bell went off. The previous high was set in 2007, before the bottom fell out of the housing market and crushed the economy. We'll hear why investors are charging ahead when we go to the New York Stock Exchange in just a couple of minutes.

North Korea reportedly says it will end the 1953 Korean War truce if the U.N. imposes more sanctions on the country. The armistice created the DMZ, the De-Militarized Zone, that separates North and South Korea. The U.N. Security Council is meeting today to consider more sanctions in response to North Korea's nuclear test last month. We'll have a live report in just a moment.

And, a Dominican woman says that she's coming clean about her claims of sex with a senator. New Jersey Senator Robert Menendez has always claimed that allegations of sex with prostitutes are not true. Now he's getting some backup from a woman who claims she was paid to lie. We go live to Washington, straight ahead.

The big story, though, today is on Wall Street. There is a look for you at the Dow Jones, hitting an all-time high a short while ago. This came charging out of the gate this morning past that old high that we said was set back in 2007. Alison Kosik at the New York Stock Exchange live for us.

So, Alison, what does this number mean to the rest of us?

ALISON KOSIK, CNN CORRESPONDENT: Well, first of all, it really is more of a milestone. But what's great about it is that it really is a new record high. You know, it's kind of like a speeding train. A lot of investors at this point, they want to kind of jump in and get in. They don't want to miss that train. But in the process, they are blowing away that recent record high. Now, the trick is going to be if the market actually closes at or above the Dow's record high.

What's interesting, though, is you look at some of the companies that investors who have reaped the rewards of this market, and you look at one of the market low points for the Dow, March 2009. You know the Dow has gained about 7,000 points since that low. But I want to show you just how about seven companies have done because they've tripled in value. Like American Express, up almost 500 percent. Home Depot, Caterpillar, Walt Disney, G.E., look how much they have increased their value since March of 2009.

But, of course, the big question is, you know, the money question, will this train keep going? Many believe that, you know, a good reason for this rally is, it's a Fed-fueled rally, meaning the Federal Reserve continues pouring stimulus into this market. That's not going to last forever. So what you may wind up seeing is, you may see some new records being hit, but at some point investors are going to say, you know what, it's time to take some money off the table and take some profits.

Brianna.

KEILAR: Yes. And, of course, we don't know when that will happen, but I'm wondering, do we have any idea how many Americans are actually invested in the market? Because it seems like everyone's jumping in.

KOSIK: It does. You know, Gallup actually keeps polls of this. And the last time they polled was about a year ago. And at that time it showed only 53 percent of Americans were actually invested in the stock market. That's a record low since those polls began themselves. So, it is safe to assume at this point that that number, that 53 percent, is much higher now.

And if you got in early, meaning right when the market was at one of its recent lows in March 2009, you're really reaping reward. Here's an example for you. If you invested $10,000 in an S&P 500 index fund at the market low in March 2009, you'd have more than $22,000. Not a bad return. But then again, you would have had to deal with the whole -- you know, the roller coaster ride from, you know, from March 2009 up until now.

Brianna.

KEILAR: That's right. Some of that money would have had to go towards your Tums or something like that.

KOSIK: Exactly.

KEILAR: Alison Kosik for us at the New York Stock Exchange. Thank you for that.

You know, North Korea is so angry about possible new sanctions, that the country is actually threatening to end the truce that put an end to the Korean War in 1953. That's according to South Korea's Yan Hap (ph) news agency. The threat comes as the U.N. Security Council meets today to consider authorizing more sanctions in response to North Korea's nuclear test last month. Anna Coren just left South Korea. She is in Hong Kong right now.

Anna, how serious is this threat? Does it really have teeth? ANNA COREN, CNN CORRESPONDENT: Well, Brianna, it is serious. The reason being is that we are used to the angry, fiery rhetoric coming out of North Korea. But this time they are making these serious threats. Threatening to end the armistice agreement that they signed in 1953, which effectively ended the Korean War.

Now, we know that North Korea is unpredictable. That they're provocative and they love to grab the world's attention. Well, they've certainly done it this time. In a statement issued from a high ranking North Korean officer, he basically said that, as of March 11th, that's when they will nullify the agreement. Now, March 11th, of course, is when the U.S. and South Korea will hold these joint military exercises.

Now, Brianna, I want you to have a listen to what some people in North Korea are saying. It's worth mentioning that this reaction is coming from the state's broadcaster.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): We need to use all our power and destroy the U.S. and other enemy forces and unite our country. In this way we can follow our dear leader's wish. We should use this opportunity to really break U.S. confidence and unite our country.

UNIDENTIFIED MALE (through translator): We are the peacekeeping people's army. If the U.S. tries to light any small fire in our territory, we will use this as an opportunity to unite the country. We will do our best to achieve what our supreme commander, Kim Jong-un, wants. No matter what the U.S. says, victory is ours.

(END VIDEO CLIP)

COREN: Now, you would have to assume that this is propaganda, but, still, some very patriotic statements coming out of Pyongyang.

Now, I think the international community is obviously very concerned. Will this mean all-out war? I think it's a little premature to say that. But having been in South Korea recently, certainly this will raise tensions even more so, Brianna.

KEILAR: And, Anna, China, which is a key North Korean ally, is supporting these sanctions against North Korea. That's not necessarily what you would expect, right?

COREN: No, exactly. China has been a big supporter. It's the only supporter really of North Korea. It's biggest trading partner, providing fuel and food. And for China to come out and bank (ph) the sanctions from that missile test in December and then again onto the nuclear test last month to come out and say, yes, North Korea needs to be punished, this is a big move because, in the past, China has certainly had some influence over what North Korea does. You'd have to assume, considering that North Korea continues to go against the international community, that China's influence is waning.

So, obviously, more sanctions, tougher sanctions, are expected out of the U.N. Security Council. They've been meeting for more than an hour now. But the feeling is, Brianna, that sanctions are not working. That North Korea is immune to further sanctions and it's really dialogue that is going to move this issue forward, Brianna.

KEILAR: Anna Coren for us in Hong Kong. Thank you, Anna.

Well, Dennis Rodman's basketball diplomacy isn't getting a whole lot of support from Secretary of State John Kerry. Kerry told CNN the former NBA's star's trip wouldn't do anything to resolve the tension between Pyongyang and much of the rest of the world. He says President Obama has always shown he's willing to work through the diplomatic process but North Korean Leader Kim Jong-un needs to do one thing.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: North Korea keeps choosing to make belligerent and reckless moves that threaten the region, their neighbors, and now directly the United States of America. So it's very easy for Kim Jong-un to prove his good intent here also, just don't fire the next missile, don't have the next test.

(END VIDEO CLIP)

KEILAR: And now to Washington, where New Jersey Senator Bob Menendez finds himself in the middle of a scandal, but says he'll be vindicated. A Dominican woman, who says she's one of the women in a video who claimed that Menendez paid her for sex, now says she was paid to make it all up and that she's never even met the senator. "The Daily Caller," a conservative website, published this video in November with two women claiming they had sex with Menendez for money. Their faces obscured, as you can see. He has always denied the allegations and today he calls them "false smears."

Our Dana Bash is on Capitol Hill. She talked with the senator today. And I'm also going to be talking with David Martosko. He's the executive editor of "The Daily Caller," the website that reported this story. But let's start first with Dana.

Just tell us, Dana, what is Menendez saying today?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, he's not using the word vindicated, but that's certainly the impression that he is leaving. Let's just start with the comments by Senator Menendez. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. ROBERT MENENDEZ (D), NEW JERSEY: I don't know more than what I've read, but I do know that from the very beginning I said that nameless, faceless, anonymous sources took the main -- took -- from right-wing blogs, took this story, which were just false smears right before an election cycle, attempted to do it then and ultimately drove it into the mainstream press. But they were never anything other than false smears.

(END VIDEO CLIP) BASH: Now, obviously, Brianna, we should point out that we are kind of relying on a he said/she said/she said/she said situation where it doesn't seem like many of these characters have any -- when you're talking about the people in the Dominican Republic, have a lot of credibility. For example, there's a lawyer in the Dominican Republic who allegedly helped get these women together for the taping. Our Drew Griffin was down there. He couldn't even -- he set up an interview with him, then he disappeared. He couldn't find him. That's just one example.

Another twist to this is the -- it's not just "The Daily Caller" who got interviews with these women. ABC News did as well. In fact, they put something on their website saying that they did the interviews with these women, decided not to go with the story because they could not verify the credibility and voracity of their stories. So that's another twist.

So we don't know who was behind this. If it is true, what she says, again, in an affidavit, that she was paid, who was the person who paid them? ABC News says Republican operatives were the ones who arranged the interviews that they didn't air.

One other thing I should also note, Brianna, and our viewers should know, that even if, at the end of the day, these salacious allegation of the senator being with prostitutes do end -- it ends up being false, he is still being investigated by the FBI on other issues, namely influence pedaling to help one of his big donors.

KEILAR: And, honestly, Dana, that may be the more serious of all of these issues, if the less salacious.

BASH: Exactly.

KEILAR: Dana Bash for us on Capitol Hill, thanks for that.

So let's bring in now David Martosko, the executive editor of "The Daily Caller."

David, first off, you're hearing this and "The Daily Caller" has said today that this woman that has come forward in these court documents and says she was paid to make these claims, you say that she's not actually one of the women on the video. So I want to ask you, what's the proof, because we have to take your word for it, and obviously that's not how we do journalism. So what is the proof of that?

DAVID MARTOSKO, "THE DAILY CALLER": Well, you have to understand that all of this was ginned up by a "Washington Post" report yesterday that basically uncritically reported this affidavit from the Dominican Republic. There are several things in the affidavit that bear no resemblance to the interview we conducted. The woman swearing out the affidavit, for instance, says that she was paid to implement Senator Menendez -- or rather to implicate Senator Menendez, Salomon Melgen, his big donor, and Vinicio Castillo, his cousin. Castillo never came up in the interview. And we showed the women we interviewed a photograph of Salomon Melgen and they couldn't even identify him. So they clearly weren't there to implicate him. KEILAR: So -- and I know you say that. You're saying that it appears she's out there trying to vindicate someone who was never actually implicated. That that's something that came up in a story that you guys did months down the road. But also, I mean, I've read your accounts of this and you say that the way this was set up, there -- also the battery, I think, on the computer that was doing this kind of web video so that "The Daily Caller" could conduct these interviews, that at one point it actually -- it went out. I'm just wondering, what, though, is the proof that even if her -- even if you say her claims are false, what is the proof that she is not -- that she is not on this video, as she says she is. Do you have proof?

MARTOSKO: Well, for starters, I mean, again, lots of things in this affidavit don't just add up. She says that she was taped surreptitiously. She was looking into -- the woman that we interviewed was looking into the camera with a microphone clipped to her clothing. She clearly didn't identify the people she said she was paid to identify. And the woman that we interviewed went by a different name. And she -- her age doesn't even match up. You know, I'm confident that ABC News interviewed somebody, but it wasn't the same person we interviewed.

KEILAR: But someone can -- someone can lie -- but -- well, David, someone could obviously fib about their name or they could fib about their age. I mean our understanding --

MARTOSKO: And they could fib about an affidavit as well and "The Washington Post" could take it and run with it in an very irresponsible way.

KEILAR: Sure. Sure. And that's why we're trying to -- and that's why we're trying to get to the bottom of this because her face is on there, and I know it's obscured, but are you -- I'm wondering sort of what the proof is. But also, our understanding, this is what ABC News is say, is this was set up by a Republican operative. Is it possible that you were duped?

MARTOSKO: Well, we don't talk about who our sources were. What I can tell you, though, is that this particular news cycle is something that was ginned up by "The Post" in a very irresponsible way. Look, we're more than happy to dig through this as much as we can. All we want is for the truth to come out. But there is absolutely nothing --

KEILAR: I'm not asking you -- I'm not asking you to reveal your source. I'm asking -- I'm asking you if it's possible that if this was set up -- let's not say who the source is. Obviously you're not saying that. But it goes to the crux of whether your report is true. Is it possible that you were duped by someone setting this up? Have you gone back in the interest of finding the truth here to your source who set this up and said, hey, is it possible that these women were paid to do this and how can you verify that they were telling the truth, even though perhaps there are some flaws in the affidavit?

MARTOSKO: Well, it's funny. "The Miami Herald" -- "The Miami Herald" asked that attorney that last night and he said it's all lies. Figueroa, the attorney who was there tried to -- KEILAR: Have you gone back, though? I've looked. You've done dozens and dozens of stories.

MARTOSKO: We can't -- I would love to find Figueroa. I would love to find him.

KEILAR: Have you -- have you gone -- have you gone back to your source who set this up to verify that these women were not paid?

MARTOSKO: We're doing that today. And I'd be more than happy to come back on the air and talk to you about. I think there's something even larger that's missed, though. It's a question of whether Senator Menendez --

KEILAR: So then if you -- so you haven't verified that they weren't paid. So it's possible that they actually were paid and you haven't been able to be sure that they weren't?

MARTOSKO: No. That's incorrect. Figueroa told "The Miami Herald" last night that this -- that these are all lies. That it's not true. We'd love to be able to independently verify that too, but "The Miami Herald" has gotten that on the record from the attorney, that what "The Post" is reporting is not true.

KEILAR: Figueroa has said these are lies but he's been implicated in the affidavit.

It's possible he's lying as well, isn't it?

MARTOSKO: It's also possible "The Washington Post" made up a piece of shoddy journalism based on thin sourcing.

But, you know, it becomes a "he said/she said" between "The Washington Post" and everybody else out there.

The few of us who know the facts about that interview know that "The Post" report is false, as well.

KEILAR: Look, we've reported this, as well, David. We've reported this, as well, on the affidavit.

We have gone down -- CNN has -- to the Dominican Republic trying to report this story in the way that The Daily Caller has and we have unable to do it because we just -- we haven't gotten the -- in touch with the person, has not responded to us, who initially was soliciting this story, trying to get CNN interested in it, and other major news organizations haven't, as well.

I mean, isn't it just possible that Figueroa is lying and there is something to the fact that this woman may have been paid or these women may have been paid?

MARTOSKO: Look, it's possible the sky is orange. That doesn't mean it's so.

KEILAR: But you haven't verified it? You haven't verified it at this point?

MARTOSKO: We verified it when we first conducted the interview.

KEILAR: Which isn't to say your story is necessarily untrue, but you don't actually know that?

MARTOSKO: No, we're quite confident our story's true. We verified it thoroughly when we ran it. We wouldn't have run it if we hadn't verified it thoroughly and thoroughly vetted our sources.

The bigger picture here, though, and I keep trying to get to this, is that Senator Menendez was accused of something very serious, which was soliciting and cavorting with prostitutes. This isn't the only time he's been accused of that.

The big picture here is that we have actually found and surfaced an actual American escort who told us, in repeated interviews, that she had had the senator as a client and characterized him as a very active participant in this sort of escort community.

And there are other women -- again, these happen to be unconfirmed -- who have accused him of engaging in sex for money with them when they were as young as 16.

This becomes a pattern. If this was just a one-off thing ...

KEILAR: Except there needs to be proof, David, and so, we're going to be very intrigued ...

MARTOSKO: We have an escort in the United States who's told us this on the record. We published it last month.

KEILAR: I will tell you in this particular story about the Dominican Republic, we'll be very interested when you do go back, double-back with your sources, to see that indeed these women were not paid.

We'll be very interested to see what proof you can bring to us, and we'd love to have you back on to talk about it.

MARTOSKO: Of course. Absolutely.

KEILAR: David Martosko with The Daily Caller, thanks for joining us.

Here's more of what we're working on for "Around the World." OK, prepare to be totally grossed out here. This is out of Iran. We're talking about big, nasty rats. They're actually the size of cats.

The population is spiraling out of control despite the government's attempts to knock them out with poison. So, what's their new solution? Sharpshooters. That's right. We have that next.

(COMMERCIAL BREAK)

KEILAR: Here are the stories making news "Around the World" right now.

It is a grim milestone. The U.N. predicts the number of refugees fleeing from Syria will hit 1 million.

People are primarily spilling into Jordan, Lebanon, and Turkey. The numbers are so high, relief agencies are having trouble keeping up.

The civil war has raged through the country for the last two years.

In Moscow, police are questioning a suspect in an acid attack on a ballet director. Sergei Filin was doused with the chemical by a masked man in January. It left burns -- left him with severe burns to his eyes and face.

Doctors worked to save Filin's sight. They say it will take at least six months to recover.

Filin is the artistic director of Russia's illustrious Bolshoi Ballet.

STEPHENS: Now, let's head to Tehran, Iran, where they have a big problem and it's kind of a gross one, too -- genetically-mutated rats.

Army snipers are going out at night, hunting these things. An environmental expert says he thinks they're going so big because he thinks they've been exposed to radiation and chemicals.

STEPHENS: Sloane Stephens burst onto the international spotlight with her upset win over Serena Williams at the Australian Open, and since the win, the teen phenom has become the "it-girl" of professional tennis.

Just yesterday, John McEnroe said Sloane would be ranked in the top 10 of women tennis players very soon. That must be music to her ears as she joins us now from Palm Springs, California.

First off, Sloane, thanks so much for being here.

SLOANE STEPHENS, TENNIS STAR: No, thanks so much for having me.

KEILAR: I'm just wondering how has your life changed since you upset Serena Williams? What was the before and what was the after?

STEPHENS: It's pretty much the same. I just -- my mom lets me eat out more and I got a little bit more of an allowance.

But other than that everything is really the same. I just kind of hang out and do what I was doing before. Nothing's really changed that much.

KEILAR: You don't feel any sort of increased pressure or expectation? It's amazing to hear you say that nothing's really changed.

STEPHENS: Yeah. I mean, definitely a lot of pressure and expectations, but I mean, that's always going to be there no matter what

Even if I was number 60 in the world, there will be someone saying that I need to get better, I need to do this, I need to do that. Now, that I'm 16 in the world someone's saying I need to do this if I want to get to this and all that stuff, so it's kind of always the same. There's always another story. There's always somebody talking and some of the things like that.

But you've just kind of got to get through it and just do your best really.

KEILAR: It's admirable you're staying level headed about it, really impressive.

What was it like to play against the pro that you essentially idolized growing up?

STEPHENS: Yeah. Definitely. It was really crazy, really intense and really tough, but I just went out and played my game and did my best. And just tried to do as well as I could. And I came out with a win, so that was awesome.

KEILAR: You've got a very big summer planned, Sloane. Tell us about the tournaments that we'll be seeing you in.

STEPHENS: So, this summer, I'm going to play in the U.S. Open series and it's five weeks of women's and men's tournaments, back-to-back finals.

And today is the first day in the 10-year history that all of the tickets are going on sale for all tournaments and the U.S. Open.

So, wherever you live, come visit us in the closest city you can. We're going to be in D.C., Atlanta, Winston-Salem, everywhere pretty much, Carlsbad, San Diego, and everywhere.

So, just come visit us. And you can go to USOpenSeries.com to get your tickets.

KEILAR: And you are -- you're just 19-years-old. You're doing so well.

I'm wondering if you can tell other aspiring young tennis players some of the things they need to do as they look to you in this amazing position that you're in.

STEPHENS: Yeah, definitely. A lot of hard work. Just do your best and enjoy it. Especially when you start off, it's really fun. And just have fun and do your best always, 100 percent effort.

And just, whatever you want to do, just follow your dreams, follow your heart, and just keep up all the good work.

KEILAR: You are cool as a cumber. I'm very impressed, Sloane Stephens. Thanks for joining us.

I suppose that might be why you do so well out there on the court. Thank you.

STEPHENS: Thank you.

KEILAR: Sloane Stephens joining us there with some words of inspiration and advice.

Coming up, a storm hitting the Midwest grounding flights and now it's headed for the East Coast. That's next.

(COMMERCIAL BREAK)

KEILAR: In the U.S., a winter storm dumps heavy snow all over the Midwest as it makes its way to the East Coast.

The storm has dropped almost a foot of snow in parts of North Dakota, Minnesota, and Illinois.

There are actually near-whiteout conditions in North Dakota. A lot of tow trucks are trying to retrieve stranded drivers there.

And Jennifer Delgado, joining us now from Chicago, which is getting hit hard, as well.

So, Jennifer, I understand there's been a lot of flight cancellations there in Chicago. Not so much fun for travelers.

JENNIFER DELGADO, AMS METEOROLOGIST: Yeah, absolutely. You never want to be stuck in the airport.

But the reality is, we are talking nearly 1,000 flights that have already been canceled and this is just the precaution. This is not actually weather cancellations.

Now, we are talking about 850 flights out of O'Hare as well as 230 out of Midway, and that's between 10:00 a.m. and 5:00 p.m. Again, that is a preemptive order.

Now, we want to talk more about what's happening in Chicago. Yeah, the snow is coming down. It's going to get heavier, and even by the time folks are coming home on their evening commute, we're going to be looking at really tough travel conditions out there because we're also going to combine in winds coming from the north-northeast right around 30-miles-per-hour and that's going to drop the visibility at times in addition to causing more of those air travel delays.

Now, let's talk about the storm and where it's headed. Across parts of Chicago, and parts of Illinois and Indiana, we're going to see six- to-eight inches of snowfall.

But as that storm makes its way over towards the east, it's going to be moving through the Central Apps.