Fox stands by decision, Elway supports his coach

John Elway, of all people, agreed with that call.
Given the ball at his 20 with 31 seconds, two timeouts and one of the best quarterbacks in the game, the Broncos coach decided to run out the clock and head to overtime.
Result: Baltimore 38, Denver 35. End of season in Broncoland.
Fox said he felt good about the decision when he made it Saturday, toward the end of one of the most disheartening losses in the franchise's history. After hashing it over during the last two sleepless nights, he stood by his decision.
"I'd do it again 10 times if it presented itself in that situation," he said Monday at Denver's season-ending news conference, where he was joined by Elway, the quarterback-turned-front office executive.
Even 48 hours after the game, that single decision remained the most hotly debated of the many Fox, Manning and the Broncos made in their gaffe-filled loss to the Ravens. The second-guessing only got more intense Sunday after Atlanta moved the ball 41 yards in 12 seconds to set up the game-winning field goal in its 30-28 victory over Seattle.
But, Fox said, Denver's situation was nowhere near what the Falcons faced. The Falcons were losing and had no other choice. They were playing in a dome. The Broncos had just given up a game-tying 70-yard touchdown pass and were standing on the sideline in disbelief. The temperature was below 10 degrees. Manning had thrown the ball downfield a grand total of twice the entire game.
"You watch a (70)-yard bomb go over your head, there's a certain amount of shock value," Fox said. "A little bit like a prize fighter who gets a right cross on the chin at the end of a round, you're looking to get out of the round."
Elway, of course, built his career around extracting the Broncos from impossible situations. But asked specifically how he would've responded in his playing days if told to take a knee under those circumstances, he sounded not at all like the go-for-broke quarterback he once was.
"I thought it was the right thing at that time," Elway said. "I think with where the team was mentally and the situation we were in, I thought that it was a good move."
Though the Broncos recovered and stopped Baltimore twice in the overtime, eventually Manning threw an interception that set up the Ravens for the winning field goal. It was a sudden, shocking end to a season that had Super Bowl written all over it. Instead, this year is drawing more comparisons to 1996, when the Broncos also were 13-3, also were top seeds and also lost by three points in the divisional round — to Jacksonville instead of Baltimore.
At the time, Elway was 36 and still searching for his first Super Bowl title. He won the next two.
Currently, Manning is 36 and stuck on one Super Bowl title. He signed with the Broncos last offseason to win a few more.
"I think having been through this before, and having been disappointed before, I realized that this was a possibility," Elway said. "The bottom line is how we learn from this situation. If we get defensive and don't look at everything we did in this game and try to learn from it, then there is a chance we can experience it again. Hopefully, we're back in this situation again and we will have looked at it the right way and learned from the situation."
While Fox conceded there were coaching mistakes in the game — most notably not having safety Rahim Moore coached up well enough to properly defend the pass that tied the game — he stood by his two most important strategic decisions.
A few minutes before kneeling on the ball, Denver was up by seven and trying to grind out the clock. Despite being down to their third-string running back, 188-pound Ronnie Hillman, the Broncos called three straight running plays, including a run off right guard on third-and-7 that went for no gain. That ran the clock down to 1:15 and made Baltimore burn all its timeouts.
But three plays after a punt, Joe Flacco threw the improbable 70-yard touchdown over Rahim Moore and into the hands of Jacoby Jones that tied the game.
"I've never believed in, 'It's one guy, one play,'" Fox said when asked about Moore's role in the loss. "It obviously was a big play."
Fox said he played the percentages on all the calls — nothing more, nothing less.
According to his calculations:
—There's a 38 to 40 percent chance of converting a third-and-7 into a first down.
—By punting and giving Baltimore the ball on its 23-yard line, trailing by a touchdown with 1:09 left and no timeouts, the Broncos had a 97 percent chance of winning.
—That percentage spiked to 99.9 percent when the Ravens had the ball on the 30 with 41 seconds left.
Turned out, the Broncos are a ".1 percenter."
"I mean this in all sincerity, if I felt like we were going to give up a 70-yard touchdown pass with 31 seconds to go, we might have re-evaluated that," Fox said. "But that's not what the percentages said."
Notes: Elway said the Broncos intend to pick up the option on Manning for the next two years, which would pay him $40 million for two seasons. Manning still has to pass a physical later this winter to get the money. Elway also said the Broncos would like to bring free agent LT Ryan Clady back. ... By losing, the Broncos coaching staff gets assigned to coach the AFC in the Pro Bowl, the week before the Super Bowl. Manning said he will play in the game, as well.
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Rookie Henley wins by three shots at Waialae

Sony Open golf tournament in Honolulu, Hawaii January 13, 2013. REUTERS/Hugh …more
(Reuters) - American Russell Henley, remarkably unflappable for a PGA Tour rookie, became the youngest ever champion at the Sony Open in Hawaii when he won his maiden title on the U.S. circuit by three shots on Sunday.
Aged just 23, the fresh-faced Web.com Tour graduate displayed ice-cool nerves as he stormed home with five consecutive birdies to fire a seven-under-par 63 on the tree-lined layout at Waialae Country Club.
Co-leader overnight with fellow rookie and good friend Scott Langley, Henley mixed eight birdies with a lone bogey to post a record 24-under total of 256 in the PGA Tour's first full-field event of the season.
When he rolled in an eight-footer to birdie the par-five last, one of several stunning clutch putts he made on the day, he gave a roundhouse sweep with his right arm in celebration.
"I don't really even know what just happened," a smiling Henley told Golf Channel after becoming the event's youngest winner, eclipsing compatriot Ben Crenshaw who was aged 24 when he triumphed in 1996.
"This is the most nervous I have ever been and that's the hardest thing I have ever done, what I just did. I had to battle Tim (Clark) and I am just kind of speechless right now."
With his spectacular triumph, Henley earned an invitation to the Masters and became the first rookie to win on his debut as a PGA Tour member since compatriot Garrett Willis at the 2001 Tucson Open.
South African Tim Clark, bidding for his second title on the circuit, signed off with birdies on the last four holes for a matching 63 to secure second place.
First-round leader Langley faded with three bogeys on the back nine, carding a 70 to finish in a tie for third at 17 under with fellow American Charles Howell III (66).
TWO-SHOT SWING
Henley began another warm day at Waialae tied at the top with playing partner Langley and he benefited from a two-shot swing at the par-four first to move two strokes clear.
While Henley birdied the hole after hitting a superb approach to within three feet, Langley wound up with a bogey after finding the right rough off the tee and also with his second shot.
Langley missed birdie putts from inside six feet at the second and sixth before duffing a chip from greenside rough to bogey the par-three seventh and slip three strokes off the pace.
Henley dropped his first shot in 51 holes at the par-four eighth, where he pulled his drive into the left rough and ended up in tangly grass behind the green with his approach.
However, he immediately recovered with a two-putt birdie at the par-five ninth to reach the turn two strokes in front of the chasing pack.
Henley rolled in a nine-foot birdie putt at the 10th to maintain his cushion and did well to save par from a similar distance at the par-four 11th after pulling his tee shot on to a cart path.
He delivered a dagger blow by draining a 45-footer to birdie the 14th and stretch his lead to three strokes, then sank 12-footers at the 15th and 16th to keep the charging Clark at bay.
Remarkably Henley birdied the last two holes for good measure.
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Pats' Gronkowski needs surgery on arm

FOXBOROUGH, Mass. (AP) — Patriots tight end Rob Gronkowski needs surgery on his broken left arm, a person with knowledge of the injury told The Associated Press.
Gronkowski was injured on the Patriots' eighth offensive play of Sunday's 41-28 victory over Houston. He previously missed five regular-season games and is done for these playoffs.
The person spoke on condition of anonymity because the team has not released details of the injury.
"I'm not sure," coach Bill Belichick said after the game when asked if Gronkowski had broken his arm.
Asked if Gronkowski had been taken to a hospital, Belichick said, "Look, I just walked off the field."
He also said "he wouldn't have played if he wasn't ready" and that "the doctors handle the medical decisions."
The Patriots also lost running back Danny Woodhead for the game when he hurt his thumb carrying the ball on their first offensive play. The club provided no update on his condition.
Rookie defensive end Chandler Jones hurt his ankle later in the game.
The Patriots will be home against the Baltimore Ravens in the AFC championship game next Sunday with the winner advancing to the Super Bowl two weeks later.
Gronkowski had broken his left forearm while blocking for an extra point near the end of New England's 59-24 victory over the Indianapolis Colts on Nov. 18 and underwent surgery. He missed five games and returned for the regular-season finale, a 28-0 win over the Miami Dolphins.
He was reinjured just 6:44 into Sunday's game on a deep pass down the right sideline from Tom Brady. Gronkowski fell out of bounds as the pass dropped incomplete.
He sat on the bench, writhing in pain, while talking to team doctor Thomas Gill before heading to the locker room.
Brady provided no information on the condition of one of his most important teammates.
"I don't know anything about that," Brady said. "I haven't heard anything."
Gronkowski's teammates said that the team would miss him but that other players have to contribute.
"It's hard to replace a player like him because he's a freak of nature," tight end Aaron Hernandez said, "but everyone has to step up and everyone has to keep making plays so we can keep it rolling. (He) definitely helps me out because so much attention is on him.
"It's a big loss and you can't replace a player like him."
Last season, Gronkowski's status was listed as questionable for the Super Bowl just 48 hours before the New York Giants 21-17 victory. He had suffered a high sprain to his left ankle two weeks earlier in the Patriots' 23-20 win over the Ravens in the AFC championship game. That hampered him in the Super Bowl in which he had just two catches for 26 yards after a season in which he had 105 receptions, 15 of them in the other two postseason games.
After the season, he had arthroscopic surgery on the ankle.
On Sunday, backup tight end Michael Hoomanawanui got more action once Gronkowski left.
"I just saw him a little bit ago," Hoomanawanui said. "A guy with that much talent, it stinks. There's no other way to put it. I went down with a knee injury last year that ended my season and you never want to see that for anyone, for an opponent, but let alone a guy that you spend a lot of time with each and every day."
Asked if Gronkowski would miss the rest of the postseason, Hoomanawanui said, "I haven't heard yet. He looks like he was hurting. I'm sure we'll find out here soon enough.
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Patriots beat Texans 41-28, Ravens up next


  
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New England Patriots running back …
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New England Patriots quarterback …
FOXBOROUGH, Mass. (AP) — Tom Brady is so good at this playoff thing he seems to be going for a championship every year.
He gets another chance to lead the Patriots to the Super Bowl after earning his record 17th postseason victory in New England's 41-28 victory over Houston Sunday. Brady even outdid his childhood hero, Joe Montana, and a fourth NFL championship would equal Montana's haul.
"I love playing, I love competing, I love being a part of this organization," said Brady, who threw for three touchdowns and 344 yards. "I think I've just been fortunate to play on some great teams over the years. I never take it for granted."
Next up is Baltimore, which stunned top-seeded Denver in double overtime Saturday, and lost 23-20 at Gillette Stadium last January in the last step before the Super Bowl. But the Ravens beat the Patriots in Week 3 this season at Baltimore.
"I think the two best teams are in the final," Brady said. "Baltimore certainly deserves to be here and so do we."
Seldom-used Shane Vereen scored three times, twice on pinpoint throws from Brady, as New England (13-4) beat Houston (13-5) for the second time in a month.
Brady was missing some key helpers, including tight end Rob Gronkowski, who broke his left arm and is out for the rest of the playoffs, a person with knowledge of the injury told The Associated Press.
However, he got the usual outstanding performance from Wes Welker, his favorite target the last six years. The AFC's top receiver with 118 catches this season, Welker looked like he might reach that total against Houston's befuddled defense. He caught six in the first half for 120 yards, including a 47-yarder, and wound up with eight for 131.
And the AFC East champion Patriots got more than anyone could have predicted from third-string running back Vereen, who scored their first two TDs on a 1-yard run and an 8-yard pass. He capped his biggest pro performance with an over-the-shoulder 33-yard catch early in the fourth period.
It was Brady's 41st postseason TD pass, behind only Brett Favre (44) and, you guessed it, Montana (45).
Nice company to be keeping.
"I grew up a 49ers fan," Brady said after throwing for three touchdowns in the AFC divisional playoff. "Joe Montana and Steve Young ... those guys are in another class.
"I hope I am around for a few more years," the 35-year-old Brady added with a smile.
The boost from Vereen offset the loss of not only Gronkowski, but running back Danny Woodhead (thumb) in the first quarter.
"Shane had a great game, just a huge growing up moment for him, very special," Brady said. "There were a lot of guys who made a lot of plays."
New England's defense helped put away the Texans. Rob Ninkovich's leaping third-quarter interception stopped a drive, and six plays later, Brady hit Brandon Lloyd for a 6-yard score.
Although the Texans got two fourth-quarter TDs on passes by Matt Schaub, their season ended with four defeats in their last six games. That slump cost the AFC South champions the top seed in the playoffs, forcing a trip to New England after they beat Cincinnati in the wild-card round.
The Texans couldn't measure up.
"Whenever the season ends, no matter when, it's really hard," tight end Owen Daniels said. "The farther along you get, the harder it is to take. It's one we wanted to win really bad. It's tough to swallow ... but one team gets to have a smile on their face at the end of the season, and it's not us this year."
Unlike their 42-14 loss here a month ago, the Texans didn't fold early. J.J. Watt, their dominating defensive end, bothered Brady, and when they fell behind 17-3, they had the fortitude to climb back.
Arian Foster did all the work after Danieal Manning's second big kickoff return, this one a 35-yarder that had 15 yards tacked on when kicker Stephen Gostkowski brought down Manning with a horse-collar tackle. The Pro Bowl runner covered all 47 yards on a five-play drive and his 1-yard run — he barely squeezed into the end zone — made it 17-10.
Houston forced a three-and-out, and a short punt gave the Texans another shot just before halftime. They got close enough for Shayne Graham to kick a 55-yard field goal as the half ended.
But the Patriots pulled away in the third quarter for coach Bill Belichick's 17th postseason win, third behind Tom Landry (20) and Don Shula (19).
Now come the Ravens.
"It's sweet just playing in the AFC championship," defensive tackle Vince Wilfork. "It's a team that beat us earlier this year at their house, and a team that's riled up for us."
Needing a quick jolt after being blown out by the Patriots on Dec. 10, the Texans got it on the opening kickoff from Manning. He took the ball 6 yards in his end zone and never hesitated in returning it. He broke free at the Houston 30 and wasn't run down until reaching the New England 12.
That spark didn't even last one play, though, and Houston wound up with Graham's 27-yard field goal 63 seconds in.
And when the Texans closed the first half with a 10-point spurt, they wasted the momentum by allowing a quick touchdown drive to open the third period. Brady went to the familiar (Welker and tight end Aaron Hernandez) on that series before second-year back Stevan Ridley scored on an 8-yard burst.
New England lost Gronkowski and Woodhead almost immediately. Gronkowski missed five regular-season games with a broken left forearm, but returned for the finale. Eight Patriots plays on offense and he was gone again.
So Brady found other targets; he probably could complete passes to Belichick for big gains.
Vereen was an unlikely star. After gaining 400 yards overall during the season, he picked up 124 against the Texans. He had four touchdowns in the regular season.
"I don't come into the game knowing how much anyone is going to play," Vereen said. "I come into the game ready to go, and if my number is called, I do my best for the team."
NOTES: Brady is 3-2 in Super Bowls and if he reaches a sixth, he'll join a club that currently totals one player: defensive tackle Mike Lodish. ... New England has played in eight AFC championship games, going 7-1, including 5-1 with Brady and Belichick. ... Brady threw for 344 yards, and Schaub threw for 343. Schaub's TD passes were 25 yards to DeVier Posey and 1 to Foster. ... Foster had 90 yards rushing, the first time in four playoff games he did not reach 100. But his 515 tie for most in a player's first four playoff games with Denver's Terrell Davis.
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NFLPA: no formal investigation into RG3 injury

WASHINGTON (AP) — The NFL players' union does not plan a formal investigation into how the Washington Redskins medical staff handled Robert Griffin III's knee injury.
The NFL Players Association said Friday that they were satisfied with a report received from the Redskins detailing the procedures used by team physician James Andrews and other staff on the sidelines.
Griffin had reconstructive ACL surgery Wednesday after reinjuring his right knee in Sunday's playoff loss to Seattle. He also strained a ligament in the knee last month against Baltimore.
The NFLPA's informal inquiry focused on the quality of medical care Griffin received. The union does not have authority to investigate coaching decisions — including whether Redskins coach Mike Shanahan should have left Griffin in either game after it was clear the quarterback was hurt.
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Cowboys hire Monte Kiffin to replace Rob Ryan

IRVING, Texas (AP) — The Dallas Cowboys have hired former Tampa Bay defensive coordinator Monte Kiffin as the replacement for Rob Ryan.
The team announced the move on its website Friday, a day after the 72-year-old Kiffin was at team headquarters to interview with coach Jason Garrett and owner Jerry Jones.
The hiring of Kiffin means the Cowboys will switch back to the 4-3 defense after going to the 3-4 under Bill Parcells in 2005.
Kiffin hasn't coached in the NFL since ending a 13-year run in Tampa in 2008. He spent the past few years coaching in college with his son, Lane Kiffin, at Tennessee and Southern California.
At Tampa, Kiffin's defenses frequently were among the league's best, and the Buccaneers won the Super Bowl with him after the 2002 season.
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PREVIEW-NFL-Falcons get chance to end playoff misery

Jan 11 (Reuters) - The Atlanta Falcons earned the top seed in the National Football Conference (NFC) with a 13-3 regular season record but it is a miserable run of form in the playoffs they will try to end against the Seattle Seahawks on Sunday.
Three times in the era of head coach Mike Smith and quarterback Matt Ryan the Falcons have impressed in the regular season but have stumbled in their first games of the post-season.
Last year, the Falcons lost to the New York Giants in the wild-card round after having gone out to the Green Bay Packers in the previous year.
In fairness, both those losses came to teams who went on to win the Super Bowl that season while in 2008, the Falcons fell to the Arizona Cardinals who were so close to winning the whole thing that season.
But the inability of a team, which has looked to have quality in every area on both sides of the ball, to perform on the biggest stage has afflicted Ryan in particular.
In his three losses, the Falcons quarterback has thrown three touchdown passes and four interceptions and his best yardage was the 199 he threw for against the Giants last year - well below his career yards per game average of 243.
Ryan says he has learned from his mistakes and that this year he has been trying to keep to the same routine he has used throughout the regular season.
"The biggest thing is to get settled into your routine. Prepare the way that you normally prepare," he told reporters this week.
"My preparation this year in the regular season has been different than in the last four. I'll be consistent with that I've done this year."
The Seahawks are the biggest surprise package in the playoffs this year, having enjoyed an 11-5 season in the NFC West and then defeating the much-hyped Washington Redskins last week.
Rookie quarterback Russell Wilson has inevitably grabbed the headlines but Sunday's divisional round game could well come down to the match-up between Seattle's cornerback duo of Richard Sherman and Brandon Browner against Atlanta's impressive receivers Roddy White and Julio Jones.
"It is going to be a fun match-up," said Sherman, "They've got two of the best receivers in football. It is going to be fun."
Falcons coach Smith repaid the compliment: "I think it is arguably the best duo at the cornerback position in the NFL this year. They are big, long physical football players," he said.
With two quarterbacks in fine form, the outcome could well come down to who triumphs in that receiver-corner match-up.
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Falcons get chance to end playoff misery

against the Tampa Bay Buccaneers in Atlanta, Georgia December 30, 2012. REUTERS/Tami …more
(Reuters) - The Atlanta Falcons earned the top seed in the National Football Conference (NFC) with a 13-3 regular season record but it is a miserable run of form in the playoffs they will try to end against the Seattle Seahawks on Sunday.
Three times in the era of head coach Mike Smith and quarterback Matt Ryan the Falcons have impressed in the regular season but have stumbled in their first games of the post-season.
Last year, the Falcons lost to the New York Giants in the wild-card round after having gone out to the Green Bay Packers in the previous year.
In fairness, both those losses came to teams who went on to win the Super Bowl that season while in 2008, the Falcons fell to the Arizona Cardinals who were so close to winning the whole thing that season.
But the inability of a team, which has looked to have quality in every area on both sides of the ball, to perform on the biggest stage has afflicted Ryan in particular.
In his three losses, the Falcons quarterback has thrown three touchdown passes and four interceptions and his best yardage was the 199 he threw for against the Giants last year - well below his career yards per game average of 243.
Ryan says he has learned from his mistakes and that this year he has been trying to keep to the same routine he has used throughout the regular season.
"The biggest thing is to get settled into your routine. Prepare the way that you normally prepare," he told reporters this week.
"My preparation this year in the regular season has been different than in the last four. I'll be consistent with that I've done this year."
The Seahawks are the biggest surprise package in the playoffs this year, having enjoyed an 11-5 season in the NFC West and then defeating the much-hyped Washington Redskins last week.
Rookie quarterback Russell Wilson has inevitably grabbed the headlines but Sunday's divisional round game could well come down to the match-up between Seattle's cornerback duo of Richard Sherman and Brandon Browner against Atlanta's impressive receivers Roddy White and Julio Jones.
"It is going to be a fun match-up," said Sherman, "They've got two of the best receivers in football. It is going to be fun."
Falcons coach Smith repaid the compliment: "I think it is arguably the best duo at the cornerback position in the NFL this year. They are big, long physical football players," he said.
With two quarterbacks in fine form, the outcome could well come down to who triumphs in that receiver-corner match-up.
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Instant View: Holiday PC sales slide for first time in over five years

SAN FRANCISCO (Reuters) - Holiday season sales of personal computers fell for the first time in more than five years, according to industry tracker IDC, as Microsoft Corp's Windows 8 failed to excite buyers and many opted for tablet devices and powerful smartphones instead.
Commentary:
SHAW WU, ANALYST, STERNE AGEE
"Things are getting really tough for Dell, which is not well-positioned in emerging markets. The Asia-based players will continue to grow faster.
"It's frankly become an Asia game. HP is also actually turning around its PC business, and that's one of the reasons Dell is losing a lot of share.
"Windows 8 wasn't going to be as big a catalyst. It's so different, it's almost uncomfortably different from past Windows, and there's a risk that Windows 8 ends up like Vista.
"We're not surprised with the data, and everybody knows the trends are coming, but seeing the numbers seems to crystallize it."
ASHOK KUMAR, ANALYST, MAXIM GROUP
"That's in line to slightly worse than expected. There are multiple factors causing stagnation in the PC market.
"There's been an elongation of the replacement cycle from once every five years to once every 10 years. Historically, about 20 percent of the installed base comes up for refresh every year. Now it's 10 percent.
"There's a lack of compelling reasons to upgrade. Increases in performance have been smaller and there are fewer new applications that require more computing horsepower. In developing markets, the first purchase is not a PC, it's a smartphone, especially in markets where literacy levels are low.
"Then, not least of all, there's the incursion of tablets in the PC market.
"There are no clear compelling product cycles coming in the PC market. What could potentially resuscitate the PC market? Ultrabooks could come down in price to the level of regular laptops: $500 instead of $999. But we may be looking at low single digit growth in the PC market for some time."
AARON RAKERS, ANALYST, STIFEL, NICOLAUS & CO
"Looking at the data from the past few months, I don't think anybody is going to be terribly surprised by these numbers. A lot of people were expecting shipments in the 90 million range.
"I just came from CES and meetings with Intel and Dell. The sense is that until Windows 8 is fully installed and prices start to come down, we will be in this state of negative dynamics in the PC market. I do think that this will lift this year as Windows XP loses support from Microsoft."
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Short-sellers circle stocks as confidence wavers

LONDON (Reuters) - How durable is the Wall Street bounce following last week's U.S. budget deal? Not very, some speculators believe.
Hedge funds are betting that a rally in U.S. stocks after a retreat from the "fiscal cliff" will reverse as doubts grow that politicians are ready to sacrifice party interests to keep the world's economic engine running, early data shows.
On the cusp of a January 1 deadline, Republicans and Democrats agreed a moratorium on a package of tax hikes and budget cuts critics claimed would tip the United States back into recession.
The news triggered sharp gains in the S&P 500 index <.spx>, which rose 2.5 percent to 1,462 points on January 2. But the momentum is fading, leading some funds and analysts to predict a tough near-term outlook for U.S. equities.
"The recent rally is an opportunity to open promising short positions. Taxes are going up in some shape and form and spending will have to be reduced," said Athanasios Ladopoulos, chief investment officer of hedge fund firm Swiss Investment Managers. "Both feed into negative sentiment down the road."
Data measuring demand to borrow U.S. shares - a proxy for the level of short-selling, or bets on a share price fall - reflects expectations that markets will falter when the next bout of negotiations collides with talks to extend a $16.4 trillion national debt ceiling in February.
According to Sungard Astec Analytics, the aggregate value of U.S. shares on loan rose by 3 percent to $358 billion in the week to January 4, as skeptical funds bet on falls in consumer confidence and company earnings.
That compares with a peak of $404 billion, seen in June when the Federal Reserve rowed back on employment predictions and cut 2012 economic growth forecasts to 2.4 percent from 2.9 percent.
By contrast, the aggregated value of shares in the FTSE 100 <.ftse> on loan fell 4 percent to $1.4 billion in the week to January 4, while the equivalent for the STOXX Europe 600 <.stoxx> dropped 3 percent to $6.6 billion.
Because such bets are struck privately, it's tough to pinpoint exactly when shares are expected to fall. Some bets may be pegged to the impending corporate earnings season, while others will be timed to exploit February's looming fiscal cliff worries.
SHORT, SHARP SHOCK
But even top stock market performers are seen suffering share price volatility until a compromise on cuts and taxes is reached.
Short-sellers are speculators who borrow shares then sell them in the hope of being able to buy them back at a cheaper price, before returning the stock to the original owner.
"While we are positive on U.S. equities for the year, the possibility of a short, sharp contraction on news flow is material in our view," equity strategists at BNP Paribas warned in a note, arguing equity valuations looked over-optimistic.
"The trailing price-to-earnings ratio of 15 times is above long-term averages and earnings growth has slowed to a crawl at best, compared with a consensus forecast for 10 percent," the note said.
Stock lenders - typically long-term investors such as pension funds who can earn a fee by loaning out a stock at little risk to themselves - have also spotted an increased appetite to bet on falling stock prices and have raised the cost to borrow shares by 5 basis points (bps) to about 75 bps on aggregate over the first week of 2013, Astec data shows.
This brings borrowing rates closer to the 78 bps average earned on U.S. equity lending in 2012.
"There is much unfinished business ... not to mention the much bigger question about how the U.S. can meet its long term spending commitments in the face of an ageing population," Ian Kernohan, economist at Royal London Asset Management said.
"Given the polarized nature of U.S. politics at the moment, trying to sort all this out will be an uphill task."
The S&P 500, which rose 13.4 percent in 2012, closed 0.3 percent down at 1,457 on Tuesday. Some commentators say much of the recent growth in U.S. stocks is not due to an influx of optimistic buyers, but short-sellers closing out old bets from 2012 before embarking on a fresh set of short positions.
NOT MAINSTREAM
Heavily-shorted firms like $3.7 billion-valued U.S. Steel Corp and $1.9 billion Advanced Micro Devices saw volumes of stock on loan drop by 15.1 percent to 17.5 percent and 18.6 percent to 14.6 percent respectively in the past month.
This data from financial information firm Markit supports the argument that bears, not bulls, are perversely largely responsible for driving the recent upward move in U.S. stocks.
Certainly a negative view is not mainstream for the year as a whole.
The consensus forecast from respondents to a Reuters poll in December was for the S&P 500 to finish 2013 close to its lifetime high of 1,576.09 set in October 2007.
But signs of fresh short-selling coupled with Friday's underwhelming December jobs data is putting pressure on market optimists.
Speaking at an investment forum hosted by asset manager Notz Stucki on Tuesday, Anatole Kaletsky, a financial economist and Reuters columnist, said cyclical factors such as weak housing markets have been major headwinds but there was evidence these have been neutralised.
But it may take time for this view to be adopted by many consumers. A Reuters/IPSOS online poll of U.S. consumers on Monday found four-fifths of respondents were bracing for another economic downturn.
Additional data from Markit showed sharp increases in demand to short a range of U.S. stocks who stand to lose from a dip in consumer sentiment.
But the list of the 30 most heavily-shorted U.S. names in the week to January 4 spans most sectors including pharmaceuticals, machinery and aerospace & defence, indicating broader pessimism in the market as well as cyclical or stock-specific concerns.
The volume of bets on a fall in the share price of $7.75 billion Tiffany & Co for instance shot up 17 percent last week to 6.4 percent, more than double the 3 percent average short interest on individual S&P stocks.
Demand to short leisure dot-com TripAdvisor Inc was up 11.6 percent to 5.2 percent and Dr Pepper Snapple Group Inc saw stock volumes on loan jump 15.1 percent to 7.8 percent.
"I am of the opinion that when Q4 earnings season starts investors will come to realise that the prospects for 2013 are not that bright," Ladopoulos said. "When the market turns down, it will take with it many of those too optimistic investors."
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