New York got outrebounded 46-34 but outscored the Jazz 34-22 in the paint where Utah was supposed to have a huge advantage with the absence of Chandler and Stoudemire.
"We had it going for a little bit and then somehow our rhythm got killed," Millsap said. "We got taken out of our stuff. Overall, our defense was pretty strong. We made some adjustments on the defensive end, but we just couldn't score."
The Jazz finished the first half strong. Mo Williams' buzzer-beater capped an 8-0 run before halftime for a 44-42 lead.
Utah fell behind 50-46 in the third quarter before Hayward hit back-to-back 3-pointers after a timeout during a 14-4 spurt that gave the Jazz a 60-54 lead.
But it all went downhill after that.
Smith scored six points in a 10-0 Knicks spurt, and the visitors enjoyed a 66-63 lead at the end of the third quarter.
Thomas and Felton put New York ahead 84-76 advantage with 4:31 to go after the stout guard and the 40-year-old veteran nailed consecutive jumpers.
Mo Williams got that back down to a three-point game with a 3-pointer and an inside bucket, but the Jazz only managed two points — on a late, meaningless putback by Millsap — in the final three and a half minutes.
The usually reliable Jazz bench didn't offer nearly as much punch as the Knicks, who had the big night from Smith. Center Enes Kanter was the only Jazz reserve in double digits with 10 points, while backup big Derrick Favors had a game-high 13 rebounds but only hit 1 of 7 shots for seven points.
This was hardly the result the Jazz were looking for as they head out on a treacherous three-game trip in Texas, beginning Wednesday in Houston with another must-win-type game.
"It's frustrating," Jazz forward Marvin Williams said. "Give a ton of credit to New York. They came out and played well."
Something that can't be said of Utah, which lost for the ninth time in 12 games despite being in what Mo Williams called "must-win mode."
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