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EARLY START

World Cup Dreams Ends for Team USA; ISIS Leader Makes Call to Action; Body Found in Jerusalem; Harsh Warnings in Oscar Pistorius' Mental Evaluation

Aired July 2, 2014 - 05:30   ET

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


INDRA PETERSONS, AMS METEOROLOGIST: Then it looks like the closest it will get will be right around Nags Head there into Thursday and Friday morning. Now, as we got through Friday morning, notice it pickings up speed through the jet stream and moves very carefully staying offshore in the major cities. But, again, you're still going to see all those impacts inland, in combination with the cold front that's going to be out there and then quickly moves into a depression as it makes its way offshore for the second half of the weekend.

Rainfall totals, they're going to be highest offshore as a lot of the system will be remaining just off the coastline. So right along that coastline itself off the shore, you'll see about eight inches of rain. But that 1 to 2 inches in through Florida,, two to four inches once you kind of get in through Georgia. But where it moves it's closest, about three to five inches can be expected around the Carolinas.

That's only one side of the equation. You still have the storm surge to think about as well. So add some additional water in there, about one to two feet in through Florida. Again, those higher amounts, especially once you get towards those Carolinas, that's where you're going to see that storm surge a little higher, about three to five feet. Definitely a troubled spot on those outer banks but will be making its closest impact there.

In through Florida, here's the timing today. This is where you're going to see your largest impact. Moving into a category 1 hurricane. This is Thursday, 6:00 in the evening. Very close here to that coastline. And then remaining a category 1 hurricane even as we go through Friday. So Fourth of July, notice the system itself hanging off the coastline. But there's two things to be looking at.

The other is the cold front that's bringing severe weather. This tropical moisture is only going to enhance the rainfall. You're going to see from the cold front so you're may be seeing a lot of rain out there, just may not all be from the hurricane itself. Then it starts to weaken as it moves into colder waters and makes its way offshore in through Saturday.

So the other side of that equation, some people are saying, I'm going to get out. I'm going to beat the system, I'm going to fly out today, I'm heading west. Careful, you do have severe out there really all through New England all the way back even in through the Carolinas. So it's not going to be that easy to see trouble there for just from that alone today.

MIGUEL MARQUEZ, CNN ANCHOR: But I think one of the biggest problems is the confluence of that storm out at sea and that cold front coming in. Lots of rain for possibly New York City.

PETERSONS: That's it. For the northeast and south that can be the concern, of course. The hurricane will have a bigger impacts just south down towards the Carolinas.

MARQUEZ: Yikes. Wow. We'll hold on to our seats.

CHRISTINE ROMANS, CNN ANCHOR: Thanks so much, Indra.

MARQUEZ: Thanks, Indra.

PETERSONS: Sure.

MARQUEZ: The future of American soccer looks bright, but that's not much consolation this morning at all really for Team USA, who gets set to fly home from Brazil. The Americans ousted from the World Cup in a nail-biter against Belgium. Even a record-setting performance from goalie Tim Howard wasn't quite enough.

ROMANS: Wow, but what an amazing performance by him. So, now let's start looking ahead. Some think Team USA could make big noise in four years.

Lara Baldesarra has more for us this morning from Brazil.

LARA BALDESARRA, CNN SPORTS CORRESPONDENT: Well, Christine and Miguel, I'm sure that neither of you are able to sleep off that heartbreak from USA's loss in the World Cup which eliminates them. You know, it was a very well-fought match against Belgium. It was pretty much played out exactly how I expected. It was very evenly fought. This match went into extra time. And that is where the USA ultimately lost.

But the USA, they surpassed all of our expectations. No one even thought that they would be able to make it to the Round of 16. But sure enough, they did. And in the end, it was Tim Howard who was truly the standout man of the match. Sixteen saves he made. He was simply a beast in the match against Belgium.

Now these saves, these weren't just everyday run-of-the-mill saves. These were spectacular saves. Impressive saves. Saves that any keeper in the world hopes to make. Tim Howard did that. He made 16 saves in all. And that is actually a record for a keeper in a single World Cup. Tim Howard clearly quite impressive.

But he wasn't the only impressive piece of this game for the USA. We actually saw a glimmer of the future on this team, DeAndre Yedlin, he was -- he's just 20 years old. And every touch that he had in this game, after he was subbed on, it almost led to something. He was truly a standout player. Afterwards, I asked him what it's like to be the future of American soccer, and he said, well, he's just looking forward to being part of it. And he mentioned Julian Green. Julian Green made his World Cup debut.

His debut for the USA. And of course, he put the USA on the scoreboard. So there's a lot to look forward to when it comes to this American squad. Not any longer this year, but 2018, here we come.

Christine, Miguel, I'm looking forward to the future.

ROMANS: And we'll take that optimism in that.

MARQUEZ: Yes. Well, what else do we have, put hope.

Developing this morning, more uncertainty in the battle over Baghdad. The leader of ISIS calling on Muslims around the world to join his extremist cause and hope build a new Islamic state he declared just a few days ago.

Now more deadly clashes being reported outside of Baghdad and parliament appears powerless to stop it.

Nima Elbagir is live in the city with the latest.

Nima, any chance of the Iraqi government forming a new government, an inclusive government soon?

NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: Well, they're in session for about 30 minutes before they decided to suspend parliament and postpone, they're reconvening for a whole week. So it doesn't really bring about a lot of optimism when you think about it in those kind of terms.

The worry is, of course, that so much is riding on this new Iraqi government. Not at least any kind of sped-up U.S. military support, whether that is in the air or even a broader presence on the ground. For now, we know that they have deployed more troops and that those troops will be deployed in more areas than they have previously been placed along the major routes around the airports.

And Iraqi state TV just reporting now that some of those U.S. military advisers will even go out into the field and play a coordinating role on the ground, in terms not just intelligence coordination, but also, really, to have an impact on what's happening on the ground. What kind of fight back the Iraqi army is capable of posing at this stage.

The second batch of Russian fighter jets is now in hand. And the hope is that it's in the sky that the Iraqi government is going to be able to try and claw back some of these momentum, Miguel. But U.S. officials telling us that the -- they're posing a credible threat to the Iraqi capital at this moment in time -- Miguel.

MARQUEZ: Well, that is shocking to hear because just last week or two weeks ago, analysts and the Iraqis and the Americans were saying look, Baghdad is not going to fall. It's not a threat at all. But now they're saying that.

What is life like on the streets there. Are Sunnis and Shias starting to go at it again? Are Shias fighting other Shias, as Maliki appears weak?

ELBAGIR: And that is always the fear here. That is always the threat. Yesterday, we received reports of four dead in different neighborhoods in Baghdad. They seem to have been killed execution- style. And even just that kind of -- those kind of images, they bring back memories of, you know, the dozens and dozens of bodies that are piling up in the streets. But we're not there yet. The pressing threat now is this ISIS ability to reinforce around the capital. And that's what seems to be changing almost day by day. Initially last week, we had -- they were losing the momentum. That doesn't seem to be the reality on the ground now -- Miguel.

MARQUEZ: That is a very, very disturbing picture you paint this morning for us, Nima. Thank you very much. Keep yourself and your crew out there safe.

ROMANS: All right. Federal prosecutors will make their case in court today to keep the accused mastermind of the Benghazi attacks behind bars. Ahmed Abu Khattalah will appear at a detention hearing in Washington. Khattalah pleaded not guilty in his first appearance before an American judge over the weekend. He is charged on the 2012 attack on the Benghazi mission. An attack that killed four Americans including the U.S. ambassador.

Republicans are criticizing the Obama administration for trying Khattalah in a civilian court rather than a military procedure.

MARQUEZ: And Army Sgt. Bowe Bergdahl taking trips off his Texas army base as part of his reintegration. Officials say Bergdahl has made stops at restaurants, stores and the library to interact with people and ease his transition into everyday life.

Bergdahl is in outpatient treatment following his release last month by the Taliban after five years as a prisoner of war. The circumstances surrounding his disappearance are still being investigated.

ROMANS: An independent panel says it's illegal for the NSA to target foreigners overseas up to a point. A review from the Privacy and Civil Liberties Oversight Board says the program is acceptable, but certain elements come close to being unconstitutional. Notably, the possible collection of e-mails and phone calls by Americans.

MARQUEZ: And new trial for the health care law. Insurance exchanges established by Obamacare were working without basic safeguards to prevent fraud. An audit finds officials did not properly check the eligibility for millions applying for coverage and subsidies. The problem does not imply rampant fraud, just the lack of any measure that many believe was actually in place.

ROMANS: Happening today, a meeting of the economic minds at the White House. President Obama and Vice President Biden will be host a lunch for some of the nation's leading economists to discuss how to rev up what's been a slow recovery. It comes a day after the president said Congress must act to fund infrastructure projects to save hundreds of thousands of jobs. Time for an EARLY START of your money this morning. Stocks in record

territory. Futures are up again after what was a record day yesterday. The Dow is oh so close to 17000. Got to within just two points of that yesterday. Closing at a record high. Keep in mind, the Dow crossed the 16000 mark just seven months ago.

MARQUEZ: Amazing.

ROMANS: A huge record run here for stocks, getting very close to another big milestone which makes the performance of some of the big losers this year that much more remarkable. Halfway through the year, the worse performing stock is Coach. It is down almost 40 percent so far. Whole Foods shares down about 33 percent.

These are household names. Staples, Best Buy, Bed, Bath & Beyond. These are some of the names that have performed the worst this year in a year that has been so far so good for almost everything else.

MARQUEZ: Coach and Whole Foods, you know, high ends for the retailers.

ROMANS: Yes, and they've got -- they've got a lot of competition from others in their space. And that seems to be an issue.

MARQUEZ: Well. All right. War being waged on the Gaza Strip. Israel seeking vengeance after three teens were kidnapped and murdered. This morning the deadly violence rages on. We are live coming right up.

(COMMERCIAL BREAK)

ROMANS: More warnings this morning from Russian President Vladimir Putin. He says he reserve the right to use force to defend Russian speaking citizens in Ukraine. Violence has picked up in the eastern part of the country after President Petro Poroshenko declined to renew a 10-day cease-fire. Ukrainian forces unleashed power by air and ground to root out violent separatists.

MARQUEZ: And another provocation from North Korea. Pyongyang fired two short-range rockets. They crashed into the sea after 110 miles in the air. This came hours after South Korea dismissed North Korea's proposal to reduce tensions. Seoul says the request was based on irrelevant and inaccurate claims.

ROMANS: More deadly violence raging this morning in the Middle East in what appears to be an act of retaliation. A Palestinian body was found in a wooded area in Jerusalem. Israeli Prime Minister Benjamin Netanyahu already condemning the killing calling it despicable and ordering an investigation.

The three Israeli teens kidnapped and murdered were laid to rest Tuesday with a commitment from Israel's leaders to avenge their deaths.

Atika Shubert is live in north Jerusalem with more for us.

Good morning, Atika.

ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Christine, I'm not sure if you have just spoken to me. My IFE is dropping out a little bit but I can describe to you the scene behind me. This is where that Palestinian teenager was last seen apparently forced into a car. Now a body was found an hour later. Police say they're still trying to identify, that body was badly burned.

But for many of the Palestinian residents here, there's no doubt about what happened. They see this as a revenge attack and the result of anger boiling over in the street. They're throwing stones and sling shots. Israeli police responding with stun grenades and tear gas.

The noon prayer has just started here as well so you can hear the calls of prayer there. But all in all, it's an extremely tense time here on the streets of Jerusalem. And this is precisely what many people have been afraid of, that the kidnapping of those three Israeli teenagers would spark off a new cycle of violence and revenge.

You have to remember, though, while this is going on here, arrests are continuing across the West Bank. In fact, at least 11 people have been -- have died in those arrests over the last two weeks. And they don't seem to be stopping. So the anger is continuing to be -- to grow. And there doesn't seem to be a way to contain it.

ROMANS: Atika Shubert for us. You can hear the call to prayer, very noisy there.

Atika, thanks for that update.

Of course, rock throwing is sort of a daily occurrence there but the tension is definitely, definitely hotter than normal.

MARQUEZ: It is. And there's no sense that Israel is going to let this go. A big question as to how far they are going to push this and my guess is they're going to push it as far as they possibly can. It will be interesting to watch the days ahead.

Now panic on the streets of Philadelphia. Check this out, a fireball barrels down the road. This looks like something out of a war zone. More than a dozen injured in the explosion. That story next.

And new this morning, Oscar Pistorius forced to undergo psychiatric evaluation. We're now learning what his doctors discovered. We are live at that after the break as well.

(COMMERCIAL BREAK)

ROMANS: An eye-opening diagnosis for Oscar Pistorius. A mental health evaluation says the bladerunner on trial for murder has posttraumatic stress. He has depression. Of most concern, he's a suicide risk and likely to get worse without treatment.

Kelly Phelps is in South Africa to break all this down for us.

Kelly, you know, we've been waiting for this -- you know, this 30-day evaluation. And now the outcome of it. How does it affect the trial of this man?

KELLY PHELPS, CNN LEGAL EXPERT: Well, arguably, this was an incredibly high point of the trial for the defense because despite the fact that the psych report says that he does not suffer from generalized anxiety disorder, all of the other observations that were read out in court play directly into the hands of the defense.

So, for example, it was mentioned that he -- he does not display signs of a narcissistic personality. He does not display a propensity towards aggression and violence. He was in a loving relationship with Miss Steenkamp and there was no evidence of emotional abuse within that relationship.

And you'll recall these have all been core part, core contentions on the state's behalf that they've relied upon in order to explain why he would have murdered Reeva Steenkamp. So despite the fact that this evaluation was called for by the state, the outcome arguably favors the defense quite heavily.

ROMANS: What happens here next, Kelly? I mean, this trial should be close to wrapping up, shouldn't it?

PHELPS: Absolutely. We actually think that we're hearing from the last defense witness at the moment. This is a sports physician who has treated Mr. Pistorius for many years in his capacity as the South African team's physician on many of Pistorius' sporting events. And he is speaking to a number of different points in the trial, both to Pistorius' character but also now we're getting to more physiological evidence in terms of his fight-or-flight response and his heightened sense of anxiety. And therefore the likelihood that he would respond in a more impulsive manner.

ROMANS: All right. Kelly Phelps for us in South Africa this morning.

Thank you, Kelly.

MARQUEZ: Now more than a dozen people were rushed to Philadelphia hospitals after an epic, epic food truck explosion. Look at this. Caught on surveillance video and darn good quality surveillance video as well last night. Two of the victims both of whom were in the truck, a mother and daughter, amazing that they survived that. They remain in critical condition with severe burns.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I heard a boom first. And then the fire just came out of nowhere.

UNIDENTIFIED FEMALE: The whole house shook like an earthquake.

UNIDENTIFIED MALE: I was walking. I literally like missed a step one foot to another. I mean it rocked me.

UNIDENTIFIED MALE: It appears preliminarily that the cause of this explosion was a propane tank.

(END VIDEO CLIP)

MARQUEZ: Now that propane tank was found about 150 feet away in someone's backyard. Most of the victims have been discharged.

How no one was killed in that is incredible.

ROMANS: Unbelievable. I know.

All right. Happening now, fire crews trying to battle a fast-growing wildfire in Napa County, California. This one has reached 2500 acres. Only 30 percent contained. A California fire official says extremely dry weather is helping fan the flames. About 150 homes have been evacuated.

It's going to be quite a summer in California.

MARQUEZ: Quite a summer. And, you know, they -- the fire years ago destroyed the entire wine season there because the smoke came out on the grapes.

ROMANS: Wow.

MARQUEZ: And completely destroyed the flavor of wine.

ROMANS: Wow.

MARQUEZ: An Illinois teenager is in the hospital after his mother tried driving through this, a giant sinkhole in Illinois following heavy downpours Tuesday night. The woman was driving in the dark when she ended up in the sinkhole. Making matters worse, they were run over by a pickup truck whose driver also did not see the gap. Shocking.

ROMANS: All right. A federal judge will have to decide if the trial of Dzhokhar Tsarnaev will be moved out of Boston. Federal prosecutors voiced their objections Tuesday despite arguments from lawyers for the alleged Boston bomber that he can't get a fair trial in Boston. That's what the defense lawyers say. They want proceedings moved to Washington. But prosecutors say Boston is big enough to find 12 impartial people for his trial.

MARQUEZ: It's going to be a big one.

An attorney representing families of two men allegedly killed by Aaron Hernandez will ask a judge today to prevent the New England Patriots from paying their one-time star $3.2 million signing bonus. The Patriots are already fighting not to pay Hernandez. But the victims' families want a court order in case an arbiter orders the team to pay anyway. Hernandez is also accused of a murder in a separate case.

ROMANS: After a string of headline grabbing incidents, troubled actor Shia LaBeouf is reportedly getting treatment for alcohol addiction. Comes just days after his latest outburst when he was arrested for harassment and disorderly conduct at a performance of the Broadway musical "Cabaret." A spokesman says he is voluntarily receiving treatment and has not checked into a rehab facility. MARQUEZ: Perhaps rehab might be best in time.

Coming up, T-Mobile allegedly bilking customers out of hundreds of millions of dollars. How did they do it? And how were you affected? We'll get an early check of your money coming right up.

(COMMERCIAL BREAK)

MARQUEZ: All right. This is looking very cool. We tried this yesterday. But NASA scrubbed the launch the last minute. But now we're being told it's all systems go. And there it goes.

ROMANS: There it goes.

MARQUEZ: The launch of the latest mission from Vandenberg Air Force Base in California. This is Orbiting Carbon Observatory 2. This is the first NASA mission dedicated to monitoring carbon dioxide. Both the source and where its absorbed, launch sets, well, for right now. And that will be seen from hundreds and hundreds of miles away. Just an extraordinary sight. I was a local news reporter in Phoenix years ago and saw one of these rockets blast off from Phoenix.

ROMANS: Very cool.

MARQUEZ: Middle of nowhere.

ROMANS: And you know what else?

MARQUEZ: It's incredible to see.

ROMANS: You know what else is blasting off? The stock market.

MARQUEZ: Yes?

ROMANS: It's done very, very well.

MARQUEZ: It's amazing. Well done. Well played. I see what you did there.

ROMANS: Thank you. Thank you. Stocks in record territory right now. Futures pointing higher. The Dow so close to the 17,000 shots. It got within two points of that marker yesterday. Closed at a record high. The Dow crossed 16,000 only seven months ago. So that's a big run here for stocks. Getting very close to another milestone.

I want to tell you about T-Mobile. It's being accused of overbilling its customers. The Federal Trade Commission has filed a lawsuit claiming T-Mobile illegal made hundreds of millions of dollars. The lawsuit said the carrier allowed third-party charges for text message subscriptions for things like horoscopes and flirting tips and also the customer never ordered the service.

The charges were allegedly concealed on monthly phone bills. T-Mobile said it stopped charging for these texting services last year and offered customers refunds. A brand new survey out this morning says when it comes to getting a

job, workers value skills over degrees. 73 percent of employees say getting trained in a specific skill is more valuable than pursuing more education. It could be good news if you're trying to get hired because acquiring a new skill can be cheaper than shelling out more for grad school tuition. Most of those surveyed feel their college education helped them get to the door but doesn't help them in their day-to-day work.

MARQUEZ: Well, that's what it's all about. It's the chicken-and-the- egg argument, isn't it?

ROMANS: Yes.

MARQUEZ: It's -- you've got to have a degree to get in the door but then you have to have something to show once you're there.

ROMANS: And you've got to have the skills once you get there. That's right.

MARQUEZ: All right. Guess what?

ROMANS: What?

MARQUEZ: "NEW DAY," it starts now.

KATE BOLDUAN, CNN ANCHOR: Arthur's wrath. The tropical storm getting stronger. Set to be a hurricane by tomorrow. New warnings this morning as millions along the East Coast prepare for what could be a miserable Fourth of July. We're tracking it all.

CHRIS CUOMO, CNN ANCHOR: Epic finish. The U.S. exits the tournament but enters America's heart. We are live in Brazil with the latest. We're going to hear from the team including the man of the match. The man in the middle. The human wall. The new Captain America. Tim Howard joins us on NEW DAY.

MICHAELA PEREIRA, CNN ANCHOR: Caught on tape, a terrifying moment. A food truck explodes in Philadelphia. Nearly a dozen injured. Two critically. What went wrong.

CUOMO: Your NEW DAY starts right now.

ANNOUNCER: This is NEW DAY with Chris Cuomo, Kate Bolduan and Michaela Pereira.