Stock futures mixed; Greek vote euphoria fades

S&P 500 futures fell 0.3 percent and Nasdaq 100 futures were down 0.2 percent after rising earlier. Dow Jones industrial average futures pared gains to trade 0.2 percent higher.

U.S. stock futures and European shares rose earlier on Monday on news Greece's centre-right New Democracy party will try to form a coalition with other parties. The rally, however, lost momentum as concerns resurfaced about Greece, which is crushed under its huge public debt and faces a daunting struggle to restore its battered economy.

"It is necessary to implement the reforms which have been suspended. Without these, Greece's GDP cannot recover and without a recovery the downward spiral continues," said Hendrik Leber, managing partner of ACATIS Investment, which manages 1.2 billion euros ($1.5 billion).

U.S. stocks had rallied on Friday to close a second straight week of gains on hopes of collective action from global central banks if Sunday's election in Greece triggered market turmoil.

Koen De Leus, strategist at KBC Securities in Brussels, said markets were likely to stay under pressure while Greece tries to form an effective government and then renegotiate some terms of its bailout with international lenders.

Societe Generale said in a note that while fears of a Greek euro had eased, the election outcome did little to alleviate the problems weighing on the much bigger Spanish and Italian economies.

Spanish and Italian government bond yields rose, dogged by concerns about Spain's fiscal and banking difficulties, and Spain's IBEX and Italy's FTSEMIB equities indexes fell by 1.4 and 1.3 percent respectively, underperforming other European markets.

The U.S. Federal Reserve is due to release a policy statement on Wednesday at the end of its two-day meeting, and the steady flow of sovereign debt warnings and downgrades is likely to continue.

"The economic backdrop remains challenging and hopes that further central bank actions will be seen remain high," said Keith Bowman, equity analyst at Hargreaves Lansdown.

However, analysts cautioned that the euro zone debt crisis remained unresolved and there was no clear indication that the U.S. central bank would respond to investor hopes for another round of quantitative measures to support the economy.

On Friday, the Dow Jones industrial average gained 115.26 points, or 0.91 percent, to 12,767.17 at the close. The Standard & Poor's 500 Index added 13.74 points, or 1.03 percent, to 1,342.84. The Nasdaq Composite rose 36.47 points, or 1.29 percent, to end at 2,872.80.

(Additional reporting by Ryan Vlastelica in New York; Editing by Ruth Pitchford)