Mark Feinsand reports:

Jake Peavy might not have the Yankees at the top of his list, but as the Padres run into more roadblocks with teams Peavy would approve, the Bombers' chances of acquiring the talented righthander keep getting better. According to a source, San Diego wants at least two pitchers and an outfielder in exchange for Peavy, the 2007 NL Cy Young winner. The Yankees don't have the prospects to match what the Braves could offer, but as of Wednesday, Atlanta remained hesitant to give up its top minor-leaguers for the 27-year-old Peavy.

The Yankees could put together a package built around Phil Hughes and Austin Jackson, according to a source, although they would likely have to include two or three more players, one of which could be Ian Kennedy. The Padres, according to the source, have no interest in Robinson Cano. ...

Ken Davidoff says that it's not happening.

Via Dave and Aziz.