market meltdown. after the dow drops more than 600 points in a day, stocks tumbled around the world, and fears here at home we could be headed for a double-dip recession. and london burning. rioting and arson for a third straight night in the british capital, and it spreads to other straight night in the british capital, and it spreads to other cities. captioning funded by cbs good morning. thanks for joining us, i'm randall pinkston in for betty nguyen. we begin this morning with the stock market. it's not a sell-off. it's a slaughter. monday the dow had its worst day in almost three years. the blue chips fell by more than 600 points, a drop of more than 5%, and it came on top of a

nearly 10% decline over the past two weeks. global markets are tanking, too. ashley morrison is here in new york with the latest. good morning, ashley. what's happening overseas? >> good morning to you, randall. asian markets stabilized somewhat after what began as a very scary day. most markets tanked as soon as they opened. japan's nikkei fell as much as 5% before closing down around 2% while hong kong's hang seng dropped 7% before rebounding to close down just 3%. other markets saw losses in the 10% neighborhood before scaling them back. european markets are opening in much the same way. germany's dax and london's ftse are both looking to rebound from losses suffered on monday. while the u.s. economy is a major concern they're also worried about the debt crisis, in particular. the building problems in italy and spain. the european central bank stepped in on monday to try to help both those nations. and wall street could be in for a better day than many had anticipated. dow futures are now trading up significantly higher than they did yesterday.

monday was the u.s. market's first chance to react to what credit -- that credit downgrade by the s&p. perhaps they're able to repair some of those losses. randall? >> thank you very much, ashley. we're going to get more now on the situation on wall street from alexis christoforous who is at the new york stock exchange. good morning, alexis. >> good morning, randall. there could be some relief in sight for investors today, as ashley mentioned, stock futures are way up, indicating a higher open here on wall street. but the worries continue. news that china's inflation jumped to a three-year high in july is only adding to investors' growing wall of worry. wall street will try to bounce back today from its biggest drop in 2 1/2 years. the dow plummeted more than 600 points monday, finishing below 11,000, and triggering a global sell-off early this morning. >> i don't want to have my money in the market. you know, you look at the market and every day, another 500 points. and every day, the numbers just

keep going lower and lower in the red. >> reporter: panic is growing over the nation's teetering economy and the debt crisis in europe. despite those fears, and standard & poor's recent downgrade of america's credit rating, investors actually pumped money back into u.s. treasuries monday. >> if you're looking for a safe home for your cash, many people, definitely u.s. treasuries. >> investors are looking for a boost when federal reserve officials meet in washington today. but here on wall street, traders aren't expecting much. >> they're not going to lower interest rates, because they're at zero. and they're not going to raise them, that's for sure. >> reporter: the fed could end up reinstating a bond buying program to bolster the economy. but experts believe the market mayhem will likely continue for some time. >> i think over the long-term, we will see better days and we will be okay. it's just going to be a slog here in the middle. >> reporter: but the longer that downturn lasts, the more of a devastating impact it could have on the economy, and the already

weak job market. now randall, bank stocks in particular are in the spotlight today. they plunged 11% yesterday. their biggest one-day drop in more than two years. investors were questioning how well big financial firms will weather an unprecedented downgrade of u.s. debt. randall? >> alexis, since it doesn't stop, where are investors looking to put their money? >> well, gold continues to outperform the rest of the market. yesterday was another record for the precious metal. blasting to $1700 an ounce. and ironically, investors are putting their money into u.s. bonds. those very bonds downgraded by s&p. because traders here tell me at the end of the day, the u.s. treasury market is still the safest place to park your money. randall? >> and what are traders saying that is needed to stop the sell-off? do they think this is a correction? or something worse? >> well, we're definitely in correction mode. the triggers i speak to believe that this malaise is going to

last until we get some real evidence that the economy is turning around. and that evidence has to come from the struggling labor market. back to you. >> well, good luck with that. thank you very much, alexis christoforous at the new york stock exchange. president obama says the s&p rating drop that triggered the stock market crisis had nothing to do with america's ability to pay its bills. it was because of the political gridlock in washington. >> no matter what some agency may say, we've always been, and always will be a aaa country. >> mr. obama acknowledged that times are tough, but that the financial problems can be solved. >> the markets continue to reaffirm our credit as among the world's safest. our challenge is the need to tackle our deficits over the long-term. >> he also called on congress to focus on job creation when lawmakers return to washington next month. the 30 americans killed in afghanistan last weekend are home.

two transport planes carrying their flag-draped coffins, will bring them back to dover air force base in delaware this morning. the troops, including 22 navy s.e.a.l.s, died when their helicopter was shot down. an afghan official says they were lured into a trap. individual remains of the dead have not yet been identified. it was the single deadliest incident for american forces since the war in afghanistan began, nearly ten years ago. in britain overnight, police called for reinforcements as rioters ran wild in london for the third night in a row. it's the worst unrest in almost 30 years, and it's spread to other cities. charlie d'agata is in london with the latest. good morning, charlie. >> reporter: good morning to you, randall. british people are outraged this morning at these extraordinary scenes of violence throughout the capital. and as you said, now spreading to other cities. they're telling police to do whatever is necessary to take back the streets. the riots tore through london like an inferno.

faster than police could stop them. rioters torched cars, stores and warehouses. the city that will host next year's summer olympics looked more like a war zone. >> innocent people getting attacked to try to produce a bus driver, which i think is ridiculous. >> reporter: residents say police why outnumbered, overpowered, and overwhelmed. >> they started running back and forth, people going one way, they go one way, and the people start chasing back. >> reporter: rioters smashed shop windows, looters grabbed everything they could. >> they had gas masks over their faces. and they had tvs and microwaves, and they could barely carry them. >> reporter: some shopkeepers took the law into their own hands. >> i managed to keep most of it. we still lost a load of stuff. >> reporter: the crisis forced prime minister david cameron to cut short his vacation and rush back to london to take charge of the emergency situation. the violence was initially sparked in a north london neighborhood after the police shooting of a 29-year-old father

of four. but authorities blame thugs for taking advantage of the chaos to cause more turmoil. now the looting, violence and arson that began in london has spread to other cities, too. london police had already called in 1700 extra officers. that wasn't enough. now, they're bracing for more violence to come. british police blame rioters for using social networking sites like twitter and facebook to organize these attacks. they're urging parents to tell their teenagers to stay indoors. but, in some cases, these teenagers aren't the types to listen, or their parents aren't the types to give those instructions. randall? >> thank you, charlie d'agata in london. just ahead on the "morning news," another deadly e. coli outbreak. plus, she was determined to do what no one has ever done. we'll show you how it ended. this is the "cbs morning news." e c"cbs morning news." ♪

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the hotel maid who says she was sexually assaulted by dominique strauss-kahn is now suing the french banker. the lawyers filed a civil suit yesterday, claiming strauss-kahn violated and humiliated her. lawyers for the former imf chief fired back. they said, we have maintained from the beginning that the motivation was to make money. the filing of this lawsuit ends any doubt on that question. the civil suit has no merit, and mr. strauss-kahn will defend it vigorously. now, to politics. texas governor rick perry looks like he's about to throw his stetson into the presidential campaign ring. perry is planning to visit new hampshire on saturday. that's the state with next year's first republican primary. he will also visit south carolina. republican sources say he will officially announce his candidacy next week. oklahoma city is recovering this morning from severe storms. several homes and buildings were damaged overnight, as heavy rain

and strong winds rolled through. the wind snapped utility poles, knocking out electric power in some places. and in west of tulsa, wind-driven grass fires have forced some residents out of their homes. the flames destroyed or damaged several buildings, and dozens of people were evacuated. some firefighters suffered minor injuries. there is no end in sight this morning to the record-setting heat wave in the southern plains. temperatures are expected to hit triple digits again throughout texas. dallas will get 107 degrees, and houston is bracing for 100. it's particularly hard on firefighters and anyone spending long hours out of doors. so much water is being used that water supplies are reaching critical levels. >> even during this time of the year, we'd probably be somewhere in the neighborhood of 35,000 to 40,000 gallons a minute. last night we hit levels in excess of 13,000 gallons a minute. >> nationwide last month was the

fourth hottest july in history. health officials in oregon report a deadly e. coli outbreak has been traced to a strawberry farm. at least 10 people were sickened after eating berries from the farm southwest of portland. one an elderly woman, died. officials say the bacteria apparently was spread by wild deer, and the farm is not at fault. it's clear this morning that three siblings on the run after a florida bank robbery are armed with an arsenal of weapons and they are not afraid to use them. the two brothers and their sister are wanted for a crime spree that started last tuesday in florida, and included a bank robbery in georgia. florida police believe dash camera video of the fugitives firing on a pursuing officer. the officer was not injured but he had to break off the chase when a tire blew, possibly hit by a bullet. marathon swimmer diane nyad ended her attempt to swim from cuba to florida earlier today.

nyad left sunday evening from havana headed for the florida keys, more than 100 miles away, without a shark cage. but strong head winds and currents were just too much and she ended her attempt about halfway across, after swimming for 29 hours. straight ahead, your tuesday morning weather. and in sports, big papi and the red sox battle to build their first place lead. battle to build their first place lead. this is the network. a network of possibilities. excuse me? my grandfather was born in this village. [ automated voice speaks foreign language ] [ male announcer ] in here, everyone speaks the same language. ♪ in here, forklifts drive themselves. no, he doesn't have it. yeah, we'll look on that. [ male announcer ] in here, friends leave you messages written in the air. that's it right there. [ male announcer ] it's the at&t network. and what's possible in here is almost impossible to say.

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here's a look at the weather in some cities around the country. in new york, thunderstorms, 90 degrees. miami, thunderstorms, 92. in chicago, partly sunny, 83. dallas, sunny, 105. los angeles, sunny, 80 degrees. time now for a check of the national forecast. the latest satellite picture shows storm clouds over much of the eastern half of the country, from the great lakes to the southeast and central plains. later today, strong winds expected in the southeast, and parts of the plains. it will be yet another triple digit day in texas, and the northeast will see more showers. in sports, the red sox took on the twins in minnesota. boston's david "big papi" ortiz had a big night with a home run in the sixth inning and with two outs in the ninth he smacked the go-ahead single. the red sox beat the twins 8-6 and extended their division lead to a game and a half.

in miami atlanta's dan uggla pushed his hitting streak to 29 games with an infield grounder. and alex gonzalez hit a three-run homer as the braves beat the marlins 8-5. in the ninth inning in new york, the mets hit a ground ball single past the second baseman. that completed a comeback rally against the padres, and new york beat san diego 9-8. 84-year-old joe paterno is hospitalized after a collision on the football field. the penn state coach hurt his shoulder and pelvis when he was hit by a receiver during practice on sunday. paterno says he'll be back soon. and spain's real madrid soccer club has signed a hot, young prospect. young, as in 7 years old. lionel coira of argentina will start training with the real madrid youth team next month. and he is not the youngest ever signed to such a deal. the youngest, believe it or not,

was 1 1/2. barely larger than a soccer ball. when we return a look at the top stories, the global stock sell-off and a look at the other country with a huge stake in the u.s. economy -- china. u.s. economy -- china. sports, sponsored by just for men hair color. live forward. for men hair color. live forward. so, i'm interviewing lots of candidates for this position. why should i choose you? well, i'm your wife, and you need a ride to chili's. hey, you're good. who will you take to chili's $20 dinner for two? try our new chicken club quesadillas. ♪ chili's $20 for two ♪ [ female announcer ] we all want cleaner laundry. we all want a world with fewer chemicals.

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,,,, on the "cbs morning news," here's a look at today's weather. severe storms will race across the south. the extreme heat continues in texas. in the west, look for sunshine with 70s along the coast, and 80s inland. now, a recap on this morning's financial developments overseas. in the wake of yesterday's huge sell-off on wall street, the worst day in nearly three years, markets in asia are again down sharply.

japan's nikkei index fell about 2%. the hang seng in hong kong more than 3%. china is blasting the u.s. for the credit rating downgrade, saying the u.s. can no longer borrow its way out of financial trouble. but, chinese officials also know that selling their huge holdings in u.s. bonds could be an even bigger disaster. celia hatton reports. >> reporter: yu chen has been trading chinese stocks for 20 years. in just one week, he's the value of his investments drop 15%. he believes he knows why. when the recession hit, the u.s. printed too much money to try to solve its problems, he says. many in china feel the same way. on the streets of beijing, few have a clear opinion on the state of america's credit rating. but many are quick to accuse the u.s. of dragging china into what could be the next round of a global recession. china's government-controlled media is growing with complaints about america's debt problem.

a weekend editorial in china's xinhua news agency stated the days when the debt-ridden uncle sam could leisurely squander unlimited overseas borrowing apeers to be numbered. china's own credit rating agency dagong is equally pessimistic, downgrading its u.s. credit rating twice in less than a year. from a-plus down to "a." as america's economic ideals don't fundamentally change, it will not increase its ability to repay its debt, and the situation will only get worse, the agency's chairman says. but few in china expect their government to stop funding american debt through the purchase of u.s. treasuries. china is america's largest creditor. but it's also counting on americans to continue buying its products. celia hatton, cbs news, beijing. this morning on "the early show," more on the global stock sell-off. i'm randall pinkston.

this is the "cbs morning news." this portion of the c"cbs mornig news" sponsored by shift move free advanced. nced. ,,,,,,

here's another look at this morning's top stories. stocks are sinking this morning on markets around the world, following the worst day on wall street in 2 1/2 years. for a third straight night, rioters roamed the streets of london, battling police and setting fires to buildings and cars. there was similar trouble overnight in three other british cities. and a somber homecoming this morning at dover air force base in delaware, for 30 american service members who were killed saturday in afghanistan when their helicopter was shot down. most of the deadliest incidents for u.s. and coalition troops in afghanistan have involved helicopters shot down by the enemy, or crashing for other reasons. seth doane is currently embedded with the medevac team in southern afghanistan. >> reporter: in the air,

afghanistan's rugged terrain is simple, and striking. but the view from a helicopter's flight deck is anything but peaceful. what specific dangers do you have in the air? >> just any kind of surface-to-air fire from the enemy. whether it be rpgs, small arms fire, machine gun, anything that they could use to take us out. that would be our biggest threat. >> have you been shot at before? >> yep, yep. >> reporter: chief warrant officer zack morrison and his co-pilot captain chris moore are serving part of the u.s. army's task force thunder medevac unit. we joined them on a medical mission on blackhawk helicopters in kandahar. >> it's hot and harsh and you've just got to keep your head about you at all times. >> reporter: the medevac team airlifted two afghans seriously injured in a motorcycle accident. how common is it for you to pick up afghans? >> very common.

we do, of course, all u.s., coalition forces, enemy persons, afghans, local national, afghan national army. anyone in the country that needs medical evacuation, we go ahead and handle. >> reporter: while the priority is stabilizing patients, this weekend's helicopter incident is adding a new focus. >> a crash like the chinook crash raises your awareness? >> yes. >> reporter: how so? >> you just kind of -- we've been here six months and you kind of get in your rhythm, and it just makes you more aware, why people are still dying here every day. >> reporter: missions continue across afghanistan. and the troops here tell us that something like the chinook incident only serves as a reminder, of what's at stake, and of the work still ahead. seth doane, cbs news, kandahar, afghanistan. coming up a little later on "the early show," can the stock market bounce back? we'll have the very latest on the economic developments here and around the world. and on the grim possibility of a double-dip recession.

also, our ongoing coverage of the famine in east africa. and the rioting in britain. plus, the latest trouble for kanye west. all that and much more coming up on "the early show." that's the "cbs morning news" for this tuesday. thanks for watching. i'm randall pinkston. make it a great day. ,,,,,,