They have their fingers crossed that Andy Pettitte will say yes to a 17th season, and while he's been telling folks he's "leaning'' toward retirement, Yankees people have decent hope he'll start leaning their way soon.At this point, I simply don't know what to expect from the Yankees. I assume the mindset behind waiting on Pettitte before pursuing Soriano has to do with their payroll - if they were to sign Pettitte and Soriano, they may not have the space to pick up another arm or bat midseason. That's really the only way it would make sense, as signing Pettitte doesn't alleviate the need for a deep bullpen.
If Pettitte retires, it's likely they'll make a play for top free-agent closer Rafael Soriano with the hope of converting him to the world's best set-up man the next two years and thereby forming baseball's best back-end bullpen combo, to go with iconic closer Mariano Rivera. If Pettitte returns, though, there seems to be a sense they will pass on Soriano.
No matter what Pettitte decides, it may behoove them to look into another starter, and there seems to be at least a modicum of interest in Freddy Garcia and Kevin Millwood. If they don't make a play for Soriano, perhaps they'll consider reliever Brian Fuentes more closely. They also seek an outfield bat and will weigh Andruw Jones and ex-Yankee Johnny Damon, and will also look at a spare infielder, preferably someone who has the arm for third base to give aging superstar Alex Rodriguez a spell here or there.
I would prefer Millwood to Garcia, simply due to the fact that he has a better track record in terms of health. Garcia has better peripherals, but it's difficult to overlook his extensive injury history - particularly when the Yankees don't have real depth behind him. While I do think that Nova, Noesi, and Phelps could contribute some quality innings this season, I shudder at the thought of having two of them in the rotation at any given time.
Andruw Jones or Scott Hairston would work in the outfield, and Jerry Hairston seems to be the best bet among infield options (though Willy Aybar is interesting, as well). I don't see the appeal of Fuentes, though I suppose he could bounce back against righties and be an effective set-up man.