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(Reuters) – Stocks dipped in choppy trading on Monday as rising Spanish and Italian bond yields indicated increasing fear of euro zone debt crisis contagion despite a victory for pro-bailout parties in the Greek election on Sunday.

Equity futures rose overnight on news Greece’s center-right New Democracy party, which backs Athens’ international bailout plan, will try to form a coalition after it won Sunday’s election.

But German Chancellor Angela Merkel said Monday she does not see any reason to speak about a new aid package for Greece on top of the two already agreed, slashing hopes that Athens would get more time to meet its fiscal targets.

The election results also offered little reprieve from contagion concerns as yields on both Italian and Spanish bonds rose, with Spain’s 10-year bond yield climbing above the 7 percent mark at which other highly indebted euro-zone nations were forced to seek bailouts.

“We don’t know how the Greek government is going to shape out and what reforms they’ll be able to put into place; there’s still considerable uncertainty in Spain about their bank issues,” said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore. European authorities have agreed to a 100 billion euro ($125 billion) rescue for Spain’s troubled banks.

“As we go through this period of indecisiveness…you’re going to see the markets basically whip around in a sideways pattern.”

U.S. stocks rallied Thursday and Friday on news central banks of major economies would take steps to stabilize markets if necessary after the Greek vote, so much of the bullish bias of the election news was priced in.

Energy shares led declines on the S&P 500 as crude futures dropped 1.3 percent.

The Dow Jones industrial average fell 26.71 points, or 0.21 percent, to 12,740.46. The S&P 500 Index d1pped 0.96 point, or 0.07 percent, to 1,341.88. The Nasdaq Composite gained 10.81 points, or 0.38 percent, to 2,883.61.

The NAHB/Wells Fargo Housing Market index rose one point from the month before to 29, its highest level in five years, but still well below 50 needed to indicate a favorable view.

Still, homebuilder stocks rose and helped the S&P consumer discretionary sector gain for the day.

Pulte Homes shares rose 2.5 percent to $9.25 and Lennar Corp added 1.4 percent to $26.25.

European shares erased early gains and closed flat, with the FTSEurofirst 300 index unofficially down 0.01 percent.

DSW Inc plunged 11.9 percent to $51.79 after the footwear retailer gave guidance for its second-quarter and full-year earnings.

(Reporting by Rodrigo Campos, editing by Dave Zimmerman)