Wall Street to open lower as Greek vote euphoria fades

NEW YORK (Reuters) - Stocks were poised for a lower open on Monday as initial enthusiasm over a victory for pro-bailout parties in Greek elections was overshadowed by rising Spanish and Italian bond yields.

Futures had advanced earlier on news Greece's center-right New Democracy party will try to form a coalition with other parties and Germany indicated it may be willing to grant the fiscally troubled nation more time to meet fiscal targets needed to avoid a euro exit.

New Democracy leader Antonis Samaras said Greece will meet its financial commitments but indicated some adjustments to the bailout agreement need to be made.

But the election results 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 level viewed as unsustainable by many analysts.

"(Samaras) is not going to rip up the bailout but he is going to ... look to renegotiate the terms, try to make them a little less onerous while still honoring them," said Ken Polcari, managing director, ICAP Equities in New York.

"So in that sense, what has really changed - nothing - so the focus goes right back to Spain as the fear continues."

The rising yields prompted Spain's treasury minister to urge the European Central Bank to make a firm response to market pressures.

Banking shares, seen as particularly sensitive to euro zone troubles, lost ground. Bank of America Corp was off 1.4 percent to $7.79 and Citigroup Inc was down 1.6 percent at $27.85 in premarket trade.

European shares erased early gains and turned negative, with the FTSEurofirst 300 index down 0.2 percent.

World leaders are expected to put pressure on Europe at the G20 summit on Monday to outline a lasting strategy to save the euro currency and end financial turmoil.

S&P 500 futures fell 7 points and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dipped 34 points, and Nasdaq 100 futures lost 10.5 point.

Microsoft Corp is close to buying business software company Yammer Inc for more than $1 billion, according to a source familiar with the details. Shares edged down 1 cent to $30.01 in premarket.

Petsmart Inc said it has increased its quarterly dividend to 16.5 cents a share and authorized a new $525 million share buyback plan. Shares advanced 0.6 percent to $67 premarket.

DSW Inc plunged 9.4 percent to $53.30 in premarket trade after the footwear retailer said that it was maintaining its full-year 2012 guidance of $3.25 to $3.40 per share, excluding items. The current Thomson Reuters estimate is for $3.37 per share.

The economic calendar is light, with the National Association of Home Builders/Wells Fargo June housing market index due at 10 a.m. (1400 GMT).

(Reporting By Chuck Mikolajczak, editing by Dave Zimmerman)