Short-sellers circle U.S. stocks as confidence wavers
* Some funds doubt political will for fiscal cliff deal
* Short positions increase ahead of Q4 reporting season
* U.S. shares on loan up 3 pct to $358 bln in wk to Jan. 4
* Stock lenders raise cost to borrow shares by 5 bps
By Sinead Cruise
LONDON, Jan 9 (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 Jan. 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, which rose 2.5 percent to 1,462 points on Jan. 2. But the momentum is fading, leading some funds and analysts to predict a tough near-term outlook for U.S. equities. Continued...