hello, i'm wolf blitzer. 1:00 p.m. here in washington, 9:30 p.m. in tehran and 1:30 a.m. saturday in pyongyang, north korea. wherever you're watching from around the world, thanks very much for joining us. and let's begin with the breaking news with the stock market plummeting once again here in the united states. today you can see what the dow is doing. down triple digits once again. yesterday the plunge was nearly 400 points. let's go to, no, our business correspondent, the host of "quest means business," richard quest, is standing by. richard, what are the latest numbers? what's going on? >> the latest numbers are grim, they are red and they show the

dow, as you see, off some 2%, more than 350 points. and if this holds for the rest of the session for the next three hours then it will be the second day in a row that the dow has lost more than 350 points. the reason can be put very neatly into two categories -- firstly, what is going on with china, how bad is the economic situation there? is there economy under control and secondly how this is spilling into the rest of the world. the question of global economic growth. bad manufacturing numbers in china, some weak numbers out of the united states, and throw into all of that, wolf, what is the fed going to do and when are they going to do it? this week we had minutes from the fed that, frankly, meant all things to all people. some believe its rates are going up in september, some saw it as december. so take that noxious mix, put it into the part of the summer,

high volatility, low volumes and this is what you get. >> you know, it's been a bullish market now for years where president obama, as you know, richard, took office the dow jones january of 2009 was around 7,000. right now it's still 16, 648. that's a very, very bullish market but if you have these drops, are we beginning to see -- and a lot of people fear this -- either some sort of correction as it's called or a new bear type of market? >> there's no reason at all to believe that this is a bear market at the moment. a correction, perhaps. the szhau down 4.5% for the year so far in the sense of the gains that have been seen. if you look at other market, europe was down very sharply as well but there's nothing out there that anybody is saying this is a full-pledged bear market. and for good reason. the u.s. even with china slowing down and these other problems the u.s. will still have average

growth. not brilliant, not subpar. unemployment is still coming down and the environment in the u.s. is conducive to raising rates because, the fed tell, things are now getting back to normal. in that scenario, wolf, it -- some would say -- i've no doubt there are people calling it a bear market but there's no reason to believe that at the moment. >> richard quest staying on top of the story for us. we'll stay in close touch with you, richard, thanks very much. other breaking news we're following, north korea's leader has a reputation for being dangerously erratic and an unpredictable dictator. kim jong-un hates to be threatened so much that he has even executed members of his own family. now the clock is ticking for south korea. turn off the propaganda broadcasts in the next 15 hours or face war. that's the threat from north korea. point of contention, south korea using these loudspeakers to blare criticism of kim jong-un and his regime over the border.

so north korea fired artillery at those speakers on thursday, south korea returned fire and pledged to respond sternly to any further professor negotiation. let's go to cnn's kyung lah near the dmz that separates north korea and south korea. what 's the very latest there, kyung? >> what we can tell you, wolf, is we have seen in the last 24 hours a ramping up of rhetoric from north korea. this is leading to some very big concerns from not just south korea but also the united states of whether or not there were will be some sort of miscalculation in all of this. this is a chess game between the two koreas as well as the united states. they want to hold their positions but not cross the line. a game of chicken, if you will, without going too far, so at this point, wolf, there hasn't been anything since thursday, the question is what happens as that deadline, that ultimatum that north korea wants south korea to stop blasting that

propaganda. what happens as we get closer to that deadline, wolf? >> any indication from south korea that officials are going to bow to the deadline threat? >>. absolutely not. that is underscored the south korean government saying no way, we are not bowing to this ult may, to this threat, south korea saying we're going to keep blaring the messages from the propaganda loudspeakers. they're going to keep blasting that across the boarder to north korea and as the deadline ticks, if there is anything that comes to try to destroy those loudspeaker, south korea's president has said we will absolutely retaliate, retaliate first, ask questions later is what she's saying, wolf. >> north korea's internet went down earlier today. i guess the question is, is that related to thietz growing tensions on the korean peninsula?

>> it was a big question of whether south korea and north korea were ramping up their cyber war. data we're getting from din research, there are two specific breaks in internet activity. we don't know why. we don't know anything about what could have caused this but what din research is saying is that there are two spresk breaks within the last 24 hours, one that was three hours long, one that was approximately an hour long why? we don't know, the question is whether or not cyber war sfaer in full effect. >> very serious tension right now. kyung lah near the dmz separating north korea and south korea. we'll get back to you as well. let's get perspective on what's going on. i'm joined by christopher hill, also joined by retired u.s. general mark hertling, the cnn military analyst commander for europe and the seventh army.

this is a major border professor negotiation under the rules of the relatively new young leader kim jong-un. is that this what's gone on? in the past his father was more predictable in these situations. >> yeah, i hate to refer to kim jong-il as more predictable or sensible but certainly compared to kim jong-un you could track your way out of this. but this is tough. first of all, the south koreans have had it with this and certainly that august 10 incident in which a young sken soldier lost his legs to a north korean land mine is considered outrageous by the south korean people. i think we are into a crisis moment right now, i'm not sure there's a way to deescalate this. we have to keep our seat belts on. >> let's not forget, general

hertling, that are that there are almost 30,000 u.s. troops not far away from this tension along the demilitarized zone. almost a a million south korean troops. the stakes are enormous. how concerned should we be right now. >> this is typical of this time of year, wolf. it seems to be ratcheted up when compared to past times. and the reason i say it's typical is that this is the time where the korean forces along with the u.s. and the rest of the allies based in south korea are conducting their freedom guardian exercises so this would be a horrible time for north korea to do anything but all of south korea is mobilized conducting wartime exercises. but at the same time, there is something that north korea does almost year ly on these

exercises. this bringing it to a new level and one of the things that ambassador hill knows so well as the sprawl -- the urban sprawl of seoul has increased over the last several years it's now under the arc of north korean artillery range. so it's dangerous, it's a professor negotiation but it's also typical for this time of year. >> i assume south korea, the u.s., japan, others are going, ambassador hill, to china for example that does have significant influence over what's going on in north korea, maybe even russia which has some influence as well. how significant could these kinds of back channel diplomacy be easing this current tension? >> well, i would hope they are being used but i would say that what makes this difference from the past is the fact the china/north korea relationship ain't what it used to be. i mean the chinese really don't have the contacts they used to

within the north korean context. when kim jong-un person walked his uncle out of a party meeting and had him killed the next day, this was quite a blow to chinese influence in north korea. is i have no doubt those channels are being used. the chinese can't be very amused by this. they must be furious, once again, with the north koreans. so this is, i think -- i agree these things happen every year and people find ways to deescalate but we're dealing with a very fidgety and very difficult north korean leadership, a man who continues to try to kind of prove himself and the question is at what point will he or can he pull back? >> and let's not forget, general hertling, you know, this you served in south korea, there are almost 30,000 u.s. troops there

right now and hopefully it won't happen but if artillery shells start going back and forth along the dmz, those troops, they're in major danger right now aren't they? >> they certainly are, wolf, and that's part of the unfortunate situation in the koreas right now. but truthfully, those troops are in danger every single day as they're caughting patrols along the dmz. things are happening daily that most of america doesn't really understand. it's just the level of this provocation is significant for this time of year and as the ambassador said, it's -- seems to be greater than year than it has in years past. but, yeah, troops are always in danger, especially in this hot spot. they consider the war ongoing, there's been no cease-fire so this is -- there's no peace between these two countries. it's a -- it's actually a situation of daily basis of conflict. and let's not forget north korea has a nuclear weapons capability right now. they may have ten or 12, maybe

even more nuclear bombs capable of being launch ed and hopefull that won't be a contingent but it's something officials have to be concerned about right now. we'll stay on top of the breaking news out of the korean peninsula, ambassador hill, general hertling, thanks to you as well. up next, new numbers show that most americans don't like this pending nuclear deal with iran. we're going to tell you about our new poll numbers, how president obama is making a knew push for support. we'll talk live with a major supporter of the nuclear deal with iran, senator bill nelson of florida. and later, donald trump defends his use of a term many people find offensive "anchor babies." the latest on the war of words, the immigration policies, a lot more news coming up.

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president obama may still be on vacation in martha's vineyard but he's pushing hard for approval with the nuclear deal with iran. the president made his point in an op-ed article, "if we are committed to preventing iran from obtaining a nuclear weapon, the choice we face is between a diplomatic solution and what would likely become another war in the middle east in the near future. the idea that we can get a better deal by talking tough or squeezing iran into submission with more sanctions is simply not realistic." let's discuss what's going on. joining us frommor lann doerks florida, is the senator from florida bill nelson. senator, thanks very much for joining us. >> thanks, wolf. >> i know you support the president, you support this nuclear deal with iraq but our new poll shows americans want congress to reject the deal and

hrnt happy with the deal. if you go further, we ask -- do you approve or disapprove the way he's dealing with the overall relationship with iran, only 38% approve, 60% disapprove. why is she having such a tough time selling this nuclear deal to the american people and selling his overall strategy as far as iran is concerned. >> because it's complicated, wolf. i am convinced this deal is in the best interest to protect the interest of the united states and israel and our allies. i boiled it down too that from the fact that if we do nothing, if we reject it, iran will have a nuclear weapon in a few months and through this deal we have the opportunity for at least ten years, if not 15 years to old

off them developing a nuclear weapon unless they cheat and if they cheat we have an inspection regime that we will catch them and then we can deal with that with all the optionings we have on the table. >> i guess the question is why he having such a hard time making that point to the american public? i'll go one step further. this new poll we have we asked "how's the president dealing with isis"? only 33% approve of the way he's dealing with isis. 62% disapprove. these are major foreign policy issues but the president is having a tough time convincing them he's right. what do you say about that? >> well, again, isis is complicated as well as is the iranian nuclear and we're in the presidential election season and there's a lot of partisan politics going around and, wolf,

i think it's -- i think it's very telling how our politics is shifting that so much of a swing in the middle, that's getting narrower, down to 2% or three% because people are retreating to their partisan sides. that's spelling over when you get into complicated matters like the iranian nuclear deal. >> speaking of that season, there's a quinnipiac poll that shows that donald trump, the billionaire businessman, would win a primary election in florida right now even beating the former governor of florida jeb bush, the current senator from florida marco rubio 21% to 17% to 11%. why is donald trump doing so

well among floridian republicans? >> that's another indication of the change of our politics he's blunt, he's direct, he's a celebrity and you put all of those things together we are in an era of celebrity politics. we are in an era of celebrity. but you put all of those things and it's not surprising that in florida he's ahead of the two florida -- >> so i just want to be precise, senator. you think that donald trump could beat jeb bush in florida in a republican primary? >> well, that's today is that poll, the long haul, the question of substance, that is yet to be told. but as of today, obviously the poll is reflecting how people

are feeling. donald trump is a very engaging fella. i really like him. you know, he owns mar lag o, th big house on palm beach. i see him from time to time. he's really an engaging fella. now, the question is, will that transl translate into long haul? i don't know. >> let's talk about the vice president of the united states, joe biden. i know you support hillary clinton for the democratic nomination but these polls show if he were to throw his hat in the ring he could beat trump in florida, this quinnipiac university poll, biden 45%, 42% for donald trump. how worried are you that joe biden will become a democratic presidential candidate and challenge your candidate, hillary clinton?

>> that's a tough question. joe joe biden was one of my best friends in the senate i am supporting hillary. i think she's getting a bad rap on all of this stuff on the e-mails and i can explain it if you want. but i don't think joe biden gets in at this point. i think he waits and sees is hillary going to survive all of this? which i think she will. if she were not do do well, maybe he'd get in but that's my personal judgment. >> all right. i know you're friends with not only hillary clinton but with joe biden as well. so you'll have a tough decision to make if, in fact, he throws his hat in the ring but right now you're with hillary clinton. we'll continue all the political discussion down the road, senator. good to have you here on cnn. >> thanks, wolf. >> we have breaking news we're following. up next, we're getting new

reports of evidence that isis has been using chemical agents. stay with us.

and there is important breaking news coming into cnn right now. a u.s. general is now officially confirming that earlier this month isis fired at least one mortar on kurdish forces in iraq that contained sulfur mustard, which is a type of chemical warfare agent. let's bring back retired u.s. general mark hertling, our cnn military analyst, former commanding general for europe and the seventh army. so if, in fact, this is true and now we have confirmation from a u.s. general, what are the implications? where do we go from here? >> the implications are first of all, wolf, this is a field test so it has to be conclusively

proven by laboratories but, truthfully, i expected this to be the case. as you know, for those of us who served in iraq multiple times we found unbelievable amounts of caches of munitions. if isis, does, in fact, have ba'athist generals in their rank, there are caches that we could find. that's the weapons that were in those caches and that may have been mustard rounds. so it doesn't surprise me but truthfully it's probably at such a low level it does contain gas, it's critical, it's a dangerous substance, it causes blistering and incapacitation at the higher levels but these rounds have been around for a while, they've probably dissipated in their content and their destructive power. so it's still an intimidation

tool but not unexpected that isis would find these kind of chemical rounds and use them on the battlefield. >> they could obviously find them left over, as you point out, from the ba'athist regime of saddam hussein. all of us remember that that regime used poison gas against ku kurds in the 1980s. but presumably they could have captured these agents from syrian military forces inside syria as well, right? >> certainly. and as we put the red line on syria a few years ago and they attempted to destroy and stated they destroyed their weapons, i fell, you wolf, in the amount of time they had to destroy the number of chemical weapons they had, there are those of us that doubted they would have gotten all of them this was on the border between arab region and the kurdish region, that tells me it came from a cache in that

area. the handling of these weapon, even bringing them the battlefield before you shoot them are dangerous and it requires the person who's about to shoot them to have chemical protective clothing on, too, because truthfully they're leaking. the substance inside the seals were coming out so it's even difficult to fire these rounds, wolf, and the fact that these -- they were shot in the syrian area and the kurdish area tells me they were found in local caches to those areas. >> stand by, general, we're getting more breaking news coming in from the pentagon right now those joined military exercises that have been under way, the threats from north korea, let's get the latest precise information from our pentagon correspondent barbara starr joining us. barbara, what's going on? >> wolf, we are in the middle of a briefing from a top official at the pentagon. that official has now spoken about the situation on the korean peninsula.

the pentagon publicly staying they are just monitoring the situation in north korea with the exchange of the artillery fire across the dmz. now in the last few minutes we are getting a very different picture. the pentagon disclosing for the first time earlier this week it suspended the ongoing war games it had with the republic of korea, with south korea so they could sit down and coordinate on this exchange of artillery fire. we have been told these are routine exercises that were under way. it's extraordinary for those exercises to be suspended. we are told the exercises are back on now but u.s. forces that were at an enhanced state of readiness for the exercises will remain in that enhanced state for the exercise which is will wrap up at the end of the month. we don't know if there are orders for u.s. forces to remain

on an enhanced status beyond that. but what we are learning from the pentagon for the first time is that this exercise was suspended because of the concerns about the situation with north korea. it was serious enough that the u.s. military felt it had to suspend what was called routine business, routine, planned exercises so it could take a pause and address the situation on the peninsula with the government of south korea. i don't think there's any way to read it other than this was a very serious matter, it remains a very serious matter that the u.s. military, that the obama administration is trying to deal with and now out in the open they had to suspend the exercises. wolf? >> how long were they suspended for. >> they are not telling us that. this is something that the pentagon is finding itself very reluctant to talk about.

we believe it was perhaps for a short period of time. we are told today the exercises are back on. but they are very aware of the rhetoric from the north and i will tell you top officials at the pentagon have told me one of the things that concerns them is kim jong-un, he doesn't often put time frames on things. be he's put a time frame on the calendar of 4:00 a.m. when he claims he might take action. that time frame, that very specific element from him is causing a lot of concern, wolf. >> serious, serious tensions on the korean peninsula and this clock is ticking. i want to get general hertling's reaction as well. much more news coming up. also manging history here in the united states, military history for the first time women are now u.s. army rangers. i'll talk to the first female four-star general about the ground breaking graduates.

stay with us.

. we're following the breaking news on the korean peninsula. extraordinary tensions. the clock is ticking, barbara starr, pentagon correspondent, just reporting that the u.s. suspended military exercises with south korea in the face of what was going on. those exercises have since resumed. once again mark hertling is joining us. i don't remember a time when the u.s. suspended u.s. south korean military exercises in the face of what are always, always routine threats coming from north korea.

what's your take on this. >> i don't remember it myself, wolf. but given the fact that we've got a superb jennifer, that's general mike scaparatti. like i said earlier, we've got seoul within the ranger of anything that north korea might send across. so i think the conversations between the state department, the south korean government and the military saying hey, we might want to suspend this and re-evaluate a little bit to make sure there are no civilians in jeopardy. that's the prudent approach. very different from the very erratic approach being taken in the north by conducting these artillery raids. >> this has to be a problem ban da victory for north korea if they can announce the u.s.

suspended military exercises with south korea in the face of threats. they're going to play this, aren't they? >> they could, wolf. but it's the way it's played. if it's a half day and you say we want to make is sure the people of south korea are defended against this kind of craziness coming from the north that's a different story than saying hey, we're giving up, we won't do the exercise the leaders in the north are intimidating us. there's no intimidation. you have to care for the safety of the people. it's a smart move by the south korean government and the u.s. in south korean military. >> i've been along the dmz. as you point out, seoul, the capital of south korea is what, 30, 40 miles away. well within artillery range. you have millions of civilians. you have a huge urban area that could be threatened by the north korea artillery shells and

missiles and rockets north of the dmz, right? >> yeah, exactly right. and this gets back to when you're planning a military exercise when you train for readiness and eventualities you normally don't put civilians at risk. in fact, you never put civilians at risk as you're maneuvering around the country side and occupying positions. when the dynamics change, the government and military has to re-evaluate quickly. it's not because of intimidation, but because they're keeping people safe. unlike the government of north korea. >> all right, there's a leader in north korea, the young kim jong-un, who is not necessarily as predictable as his father kim jong-il was by any means. we'll stay on top of the breaking news, barbara star reporting at least far while suspended the military exercises with south korea. the face of the threats coming from north korea, those exercises have since resumed.

much more on this story coming up here on cnn. we'll discuss the republican war of words on the use of the word anchor baby. stay with us. gumption to reach for the sky. that's that new gear feeling. this week, these office depot brand notebooks just one cent. office depot officemax. gear up for school. gear up for great.

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don't start enbrel if you have an infection like the flu. joint pain and damage... can go side by side. ask how enbrel can help relieve joint pain and help stop joint damage. enbrel, the number one rheumatologist-prescribed biologic. the debate over immigration reform triggered a war of words over what many consider a offensive term. donald trump defends it, using it to question the idea of birth right citizenship enshrined in the 14th amendment to the constitution. >> a lot of people think that it's absolutely in terms of anchor babies that it is not covered. so we'll find out. look, here's the story, here's

what happened -- wait a minute. wait. wait, wait. here's what's happening. a woman is going to have a baby. they wait on the border. just before the baby, they come over to the border. they have the baby in the united states. we now take care of that baby -- social security, medicare, education gave me a break, it doesn't work that way. the parents have to come in healey. >> a short time ago texas senator and republican presidential candidate ted cruz was also asked about the use of the term "anchor baby." he called the controversy, in his words, politically correct nonsense. >> there's nothing that the press likes more than a sideshow on some politically correct debate. who cares? what people care about is solving the problem and i'll tell you if i'm elected president the federal government will secure the borders. we will put boots on the ground, we will enforce the laws and

stop releasing violent criminal illegal aliens. >> let's discuss what's going on, alex castellanos is the founder of newrepublican.org and chairman of purple strategies and cnn political commentator hilary rosen is joining us. her firm consults for the democratic national committee. alex, what do you make of this debate over the term "anchor babies" right now and the fact that donald trump is defending using that phrase as is jeb bush for that matter. >> it helps donald trump and it helps jeb bush wolf. right now a lot of americans think that telling the truth is somehow becoming an insult. something prohibited and they are hungry for the opposite of phony politics they get coming out of washington. they want things called by their name, even if it offends some people. so politically this was a moment of strength for trump and jeb bush who hasn't really planted

his flag on anything . >> jeb bush used the term during an interview during q & a with reporters and said this. >> what i said is it's commonly referred to that. that's what i said. i didn't use it as my own language. what we ought to do is protect the 14th. if you want to get to the policy for a second, i think people born in this country ought to be american citizens. >> was there a misstep for the presidential candidate, jeb bush, on this or do you accept his explanation? >> you know, this chasing of donald trump's democrgogary is huge mistake. this only means that 10% of the american people. so, you know, if they are offended by anchor baby, it's really not for donald trump to say that there's nothing wrong with the word.

but here's the bigger problem that reince priebus, the chairman of the republican national committee has. in 2003, he came out with this big report about how they were going to be the open ten party, that they were going to come up with all sorts of ways to reach out, to expand their diversity. all of this is doing is driving a wedge between populations and that is a wedge that the republicans are not going to be able to get back very easily. >> you agree, alex? >> no, i don't. i think that there are families who come here and women who come here to anchor their families in the united states. that is what it is and somehow -- >> alex -- >> somehow doing that is okay. but pointing it out is not. and that's what people think is so dishonest and corrupt about our politics these days. telling the truth is not an insult. it's the truth. >> here's the truth, which -- here's the truth. which is that hundreds of

thousands of people in the last seven years have been deported who have children in the united states, born in the united states. >> but you're avoiding this issue hilary. >> no, this is the point. it's constantly being dealt with by immigration authorities. >> we just can't talk about it. >> it makes no sense. all you are doing is looking for scapegoats when that's not an appropriate scapegoat. there is an immigration problem. fix that. that doesn't mean that children born here legitimately of all races and religions deserve this kind of attack. they don't. >> i guess we'll just have to do it quietly. >> this was tweeted a while ago. let me put it up on the screen. this is from donald trump. jeb bush signed memos not to use the term "anchor babies"

offensive. now he wants to use it because i use it. stay true to yourself. trump was referring, i think, to a 2013 memo by the hispanic leadership network and jeb bush was a member of that. the former governor did not actually sign that memo, was not even aware of it. does this back and forth between donald trump and jeb bush, what does it say about the future of this republican contest? >> you may be seeing the tail end of the republican contest right now. donald trump, the outsider who wants to burn down washington, getting a lot of support early because he's your summer fling when you're 20 years old. i think amy walters wrote a wonderful piece about that. and jeb bush is the steady, older guy that you want to marry a little later and take home to your parents. i think you're seeing that both of them are as frustrated -- equally frustrated with washington and the way the

country is on the verge of decline. they just have very different ideas about what to do about it. >> we'll leave it on that note. hilary, ale elecx, thank you ve much. for 70 years, it's been a local legend. now two men claim they have found gold, guns, and gems packed on board a nazi train. we'll have the story coming up next. big day? ah, the usual. moved some new cars.

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a 70-year-old mystery may finally be solved that involves gold and jewels stolen by nazi thieves. in the shadow of a 7-year-old castle, in a labyrinth deep underground, two people say they discovered a treasure. >> translator: the council has received a letter from a law firm. we were informed that the men of poland and german represented by a law firm have discovered a german. >> the nazi ghost train, a local

legend, reportedly lost in the final days of the second world war the year, 1945, allied forces were choosing in on nazi-held territories. the germans loaded a train full of gold and weapons and it left through a series of tunnels built to secretly move nazi goods. it never reached its destination. after the war, the tunnels were sealed and long forgotten. the very existence of the ghost train remained a mystery. >> translator: no one has ever been able to confirm the existence of this train. >> polish authorities are taking the men's claims seriously saying lawyers, the army, the police and the fire brigade are dealing with this. the area has never been excavated before and we don't know what we might find.

the men have no plans to release their identities or to release the location of the train until they agree to give them 10% of the value inside. it could be worth billions. the news continues next on cnn. hi, everyone. i'm poppy harlow in for my friend brooke baldwin. thank you for being with me. the dow is down just about 300 points right now. this is the fourth straight day of losses. the u.s. economy reacting to fears of a global slow down, particularly in china. also, oil falling below $40 for the first time since 2009. cnn money's cristina alesci is following it. another brutal day. >> reporter: yes, poppy. we're officially nearing correction