environmental disaster. flooded by highly-toxic sludge. dozens of people burned. and wild weather out west. planes grounded by golf ball-sized hail. plus, roads closed by early october snow. and good morning, everyone. thanks for being with us on this wednesday morning. we begin, now, with markets on the move and what it means for the economy. asian stocks were higher across the board this morning. >> that followed a triple-digit surge for the dow, which is now up exactly 5% for the year. emily schmidt looks at what's behind the current bull run and what traders are looking forward to. >> reporter: it may be fall. but the markets are suddenly feeling like spring. the dow jones industrial average closed up more than 193 points yesterday, the highest since may. now, it's within striking distance of the 11,000 mark.

the jump came after japan's central bank unexpectedly slashed its interest rates to nearly zero. and after encouraging news from the u.s. service industries like finance, health care and trade. they reported a ninth-straight month of growth. analysts say if it's not quite a quarter-turn, it is a step taken. >> but we are moving in the right direction. the economy is in recovery mode. we are creating some jobs. i think we'll all start feeling a lot better about things, 6, 12 months down the road. >> reporter: in the latest abc news/"washington post" poll, nearly one-third of americans now believe the economy is improving. up seven points from one month ago. but nearly 25 million americans are still unemployed or underemployed. investors hope the federal reserve will do more to help the economy. fed chairman ben bernanke said this week, he is concerned about the national debt. >> the threat to our economy is real. and it is growing. which should be sufficient reason for fiscal policymakers

to put in place a credible plan for bringing down deficits to sustainable levels. >> reporter: and we should get some more economic clues later this week. tomorrow, the first quarterly corporate earning reports will come out. and on friday, the government is set to release the latest unemployment figures. vinita? >> another important week for the economy. emily, thanks. breaking news this morning. a rocket attack on a british embassy convoy in the nation of yemen. the attack took place in yemen's capital. one embassy official suffered what was described as shock injury. all of this comes two days after authorities there boosted security around foreign embassies because of a possible al qaeda attack. back in 2008, an attack on the u.s. embassy resulted in 19 deaths and more than a dozen injuries. a senior u.s. diplomat is in yemen's capital, today, meeting with opposition leaders there for the first time. another attack on western interest.

more nato oil tankers ambushed. luckily, the massive flames didn't reach a dozen other tankers that were parked nearby. it is the sixth attack on a nato convoy since pakistan closed some of its border crossings with afghanistan last month. meanwhile, taliban representatives are now engaged in secret peace talks with the afghan government. the objectives include ending the fighting while bringing taliban leaders into positions of power. any deal could force u.s. and nato troops out of afghanistan. the failed times square bomber will now spend the rest of his life behind bars. faisal shahzad was sentenced in new york on tuesday. but intelligence officials are worried that shahzad is just part of a new wave of al qaeda-linked terrorists. here's brian ross. >> reporter: the times square bomber showed no remorse. and the judge showed no mercy. life in prison with no parole. faisal shahzad shouted "allahu akbar."

then, he said brace yourself. >> you will see that the muslim war has just started. >> reporter: it was only because of shahzad's incompetence, that his car bomb did not detonate last may in times square. this is what the fbi says would have happened if shahzad had been a better bombmaker. hundreds might have been killed. >> it was totally appropriate that he forfeit his freedom because he was willing to forfeit people's lives. >> reporter: authorities say shahzad represents al qaeda's next wave. one of the dozens of u.s. and european citizens who have been recruited to terror training camps in pakistan. >> they'll have european passports or american passports and be able to get back into their country with little suspicion. >> reporter: that's what's behind the current threats in europe. germans of afghan and turkish

decent. with europe still scrambling to prevent an attack, police in france arrested 12 people on tuesday, all charged with suspicion of terrorism. brian ross, abc news, new york. and now, on top of that, the french government has issued a warning, telling its citizens traveling to britain to exercise caution, due to a very high risk of terrorist activity. back here at home, an ex-con has been found guilty in that gruesome home invasion in connecticut. steven hayes was convicted of murder, sexual assault and other charges after eight days of often difficult-to-hear testimony. he killed jennifer hawke-petit and her two daughters. dr. william petit is the sole survivor of the attack. >> there's some relief. but my family is still gone. it doesn't bring them back. it doesn't bring back the home that we had. >> in my 22 years of being a prosecutor, i can't imagine

anything that was as horrendous as the attack that we uncovered and heard about during this trial. if there ever was a case that deserved the death penalty, this is it. >> jurors must still decide whether hayes should be given the death penalty for his crime. police in mexico are now questioning claims by an american woman that her husband was killed by pirates while jet skiing near the border. tiffany hartley told police that men on speedboats shot her husband in the head. but there's no sign of david hartley's body or his jet ski. tiffany says she understands why investigators might think her story is untrue. but she says she would never hurt her husband. in houston, dozens of huge cargo ships are being kept from the nation's second-busiest port, by this, an electric tower teetering over houston's ship canal. it's been like this since a collision sunday. the economic losses because of the closure are adding up big-time. $320 million every, single day. more stormy weather is in store for parts of the west, after a day of rain, hail and

snow. the sierras got nearly a foot of snow. it caught many drivers by surprise and shut down a highway pass in the mountains. the phoenix area was battered with heavy downpours, high wind and hail as big as golf balls. the airport had to be shut down. and thousands of people lost power. today, arizona can expect more rain and hail and another half-foot of snow in the sierras. wet and windy around las vegas, denver and boise. showers on the east coast, from boston down to new york, philadelphia, pittsburgh and charleston. >> meanwhile, mostly 60s in the northeast. 72 in atlanta. 82 in miami. up to ten degrees warmer than normal in the middle of the country. 80 in omaha. 79 in kansas city. 74 in chicago. phoenix gets up to 84. sacramento, 77. and when we come back, an iconic american brand gets a makeover. plus, disaster zone. toxic, burning sludge floods a town and a countryside after building up for decades. new, tougher testing

methods. which cars meet the new level of scrutiny? and some podium problems for the president. but he takes it all in stride.

and recapping our top story this wednesday morning. the dow jones closing in on 11,000. the dow picked up 193 points yesterday, to close at 10,944. that's its highest close in five months. the big gain followed an economic report that showed

surprising strength in the economy's service sector. overseas markets are following the dow's lead, too. tokyo's nikkei average picked up 172 points today. hong kong's hang seng is up sharply in late trading. and in london, the ftse opened higher. ford is giving the lincoln brand a major makeover. plans to cut one-third of lincoln dealerships, keeping the remaining ones in areas where luxury cars are most sold. it also plans to introduce new cars and trucks. lincoln was the nation's number one luxury brand 20 years ago. but sales have been declining ever since. automobile crash tests are changing. and it's now a lot tougher to earn those coveted five stars. the new system includes an overall safety rating, plus various sub rating, as well. test dummies will also measure how crashes impact women, as well as men. 21 cars have been tested under the new system. only the 2011 bmw 5 series and a version of the 2011 hyundai

sonata got the five stars. >> long overdue tests with females, given the difference in stature. >> that's right. equality. >> that's right. coming up next on this wednesday, costly campaign. billionaire meg whitman reveals her sky-high campaign tab so far. and shown the door. another star is sent packing. without the pills. no pills, no pain. how can you get pain relief without taking pills around the clock? try thermacare heatwraps, for all day relief without pills. i was surprised, thermacare worked all day. you feel the heat. and it relaxes and unlocks the muscle. you've got to try it. [ man ] thermacare, more effective for back pain than the maximum dose of acetaminophen, the medicine in tylenol. go to thermacare.com today for a $3 off coupon. thermacare. no pills. no pain. just relief. ther♪acare. [ female announcer ] hurry in and load up on great savings during the petsmart treat your pet sale. this weekend, save 30% on pawsitively clean y bissel

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you buy 4 michelin tires. sears let's raise a glass to cookies just out of the oven. to the morning bowl of cereal. and to lactaid® milk. easy to digest and with all the calcium and vitamin d of regular milk. [ female announcer ] lactaid®. the original lactose-free milk. and now, for a look at your morning road conditions. snow could make for a slippery ride on i-80, from sacramento to reno. wet on i-5, from l.a. to san diego. and on i-15, from salt lake city to helena, montana. flooding on i-10, and 40 in new mexico and arizona. wet on i-85, around boston, new york, and philly. >> if you are flying today, you can x. some airport delays in l.a., salt lake city, vegas, phoenix, boston, new york and philly. the death toll is expected to rise from an environmental disaster now unfolding in hungary. >> four people have died after a

wave of toxic sludge swept through several villages. hundreds of residents have already been forced to evacuate. here, now, is jim sciutto. >> reporter: it's a science fiction movie that's come to life. a toxic tsunami. a wave of red sludge six feet high, flooding through narrow streets. sending hundreds of panicked residents fleeing. when i heard the rumble of the flood, said one resident, i only had time to jump out of the window and run to higher ground. bbc reporter nick thorpe is on the scene. >> you see people wadding through the mud trying to get back to their homes or retrieve things from their home. so, this is the overall visual impression of everything painted red. >> reporter: the sludge is so caustic, it burns right through clothes, even shoes. so dangerous that if ingested it could be deadly. only workers wearing suits like these were protected. the cause of all this, a dam burst at a metal processing plant, which local officials say could have been the result of human error.

the sludge, a by-product of aluminum production, contains a radioactive witches brew of heavy metals like cadmium, cobalt and lead, and traces of virtually every element found on earth. >> it's very rare that you see a chemical spill that's having such a drastic, extreme impact on people and on the environment. so, it seems to be quite an alarming situation. >> reporter: in all, 1 million cubic yards. the equivalent of 400 olympic swimming pools. engulfed, 16-square miles of southern hungary. it's reminiscent to a coal ash spill in tennessee on christmas eve in 2008. but the combination of toxins in this deadly sludge is so unique, scientists say, there's never been a spill like it ever before. and it's not over. if it seeps into rivers, it will rapidly expand this ecological disaster. jim sciutto, abc news. >> officials say it could cost

tens of millions of dollars and many months to clean up the spill. to politics now. and a new gallup poll showing democrats facing a big challenge this fall. the poll finds republicans with as much as a 56-38 advantage among likely voters. that's an 18-point difference. the poll finds that republicans remain much more enthusiastic about getting to the polls, come election day. and the republican in the california governor's race is far outspending her democratic rival. meg wittman has spent more than $140 million so far. $119 million of it her own cash. a record for any u.s. candidate. by contrast, though, jerry brown has shelled out close to $11 million. polls show a continuing dead-heat in that race. just a week after his book on the obama administration hit the shelves, bob woodward is now sharing more white house secrets. woodward told cnn that a barack obama/hillary clinton ticket is on the table. he said that clinton and vice

president biden may swap jobs. and the new ticket could give president obama the woman and latino vote that went to clinton back in 2008. now, for the kind of change the president was not expecting. he was delivering a speech in washington last night at "fortune" magazine's most powerful women summit. halfway through the address, the presidential seal suddenly fell off the lectern. >> we cannot sustain -- whoops. was that my -- oh, goodness. that's all right. all of you know who i am. >> without missing a beat, the president went right back to his speech. >> kept his cool. there's 20 days until the start of the nba season. last night, there were eight preseason games. only one that fans wanted to see. highlights, now, from jonathan coachman at espn news. >> good morning. all the hype is now over. it's time to play the games. well, at least, sort of. how about preseason basketball.

the miami heat making their home opener against the detroit pistons. the new big three. check it out. lebron james, taking his game from cleveland to south beach. dwyane wade, check this out. early on, lebron said he was in attack mode. but watch here. 3:17 into the game, dwyane wade, found out after the game he had trouble with that hamstring throughout the week in practice. he's going to be re-evaluated in a week. he'll miss at least seven days of action. he would not return. later, check out lebron, taking the rebound. going coast-to-coast. he played angry. he played aggressive. didn't smile the entire evening. think we'll see a lot of that. how about lebron to chris bosh. bosh led the heat with 20. lebron, how about 12 first quarter points, 14 in the first half, 18 for the game.

including this highlight reel slam. and then, later, lebron. no. check out the wingspan by chris bosh on the finish. we'll go third quarter now. mike miller, sharpshooter. he'll have a lot of open shots. the heat win big, 105-89, in their home opener. that will do it for now. i'm jonathan coachman. back to you guys in the studio. well, there were tears in place of laughter, as immediate yen margaret cho left the ballroom for good. >> cho was the latest to get ousted from the show. >> she joked h her feet were so messed up, she could not wait for them to recuperate. more from cho and her partner later this morning on "good morning america." >> a dramatic show. coming up next, the stories we'll be following today,

including a peace deal in afghanistan. and bill clinton heads back to a disaster zone. ♪ say it like you mean it. outspoken by fergie. exclusively for avon. call your avon representative now.

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a deal could force u.s. and nato troops to leave afghanistan. a high-profile free speech case comes before the supreme court. should members of anti-gay churches be allowed to protest at the funerals of dead soldiers? also, former president clinton heads back to haiti today. he plans to visit a temporary housing camp set up in the wake of the earthquake. and major league's playoffs begin today. the yankees take on the minnesota twins. the other series that begin today are texas and tampa bay, and cincinnati and philadelphia. for some of you, your local news is coming up next. >> for everyone else, tree houses with all the amenities. [ female announcer ] all you need for sensitive skin.

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life of researchers person murdered on his way home from the train station. conspiracy, negligence and fraud against st. joseph medical center over procedures lawyers say weren't necessary. stories ahead on this wednesday morning. it's the middle of the week i am megan pringle. >> i am jamie costello i think it stopped raining. >> thank goodness. what do you think? >> i hope so. >> let's find out. justin berk. good morning. >> not exactly. there he's rain out there. it has to be in the right or wrong location. but look at this. we have more showers today. you see what else is on the screen? we have rain showers, there's snow in west virginia above 3,000 feet. >> you go searching for this? >> snowing and sticky. hey, look it happens and probably every other october in the first week or two they get snow. doesn't portend anything for the upcoming season but it's out there. we will show you in a bit.

we have a warming trend but we are looking at the almanac that sh bring us 71. we won't get there today. today is a day that will on the chilly side and we have rain around the region. some areas are wet this morning around the beltway and the purple shading on the left side is some of the snow and mixed precipitation. we will talk about it in west virginia. let's talk about what he happening on the roads. some are wet this morning. kim brown with the latest. >> reporter: some are wet into baltimore city from howard county, no problems in howard county. roads did begin to get sprinkley crossing the bridge into baltimore county. jfx wet on the southbound side of that. but no problems. we will be up a little bit around the area because of the wet road. as we look at the cameras, 83 at war n road looks good. we have one accident in the area that is at millford mill. that crash blocks the left