* Greek elections support pro-bailout parties
* Spanish, Italian bond yields rise
* Petsmart ups dividend, sets new buyback
* Futures off: Dow 34 pts, S&P 3.3 pts, Nasdaq 0.25 pt
By Chuck Mikolajczak
NEW YORK, June 18 (Reuters) - U.S. stock index futures
slipped on Monday as initial enthusiasm for 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.
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
The rising yields prompted Spain's treasury minister to urge
the European Central Bank to make a firm response to market
"It's looking more and more like plugging the dam," said
Andre Bakhos, director of market analytics at Lek Securities in
New York. "We may have the backing of Greece to stay in the euro
zone, but that is only one aspect and as the short-term euphoria
wears off investors realize the problem hasn't gone away."
Banking shares, seen as particularly sensitive to euro zone
troubles, edged lower. Bank of America Corp was off 0.6
percent to $7.85 and Citigroup Inc was down 0.3 percent at
$28.22 in premarket trade.
European shares erased early gains and briefly turned
negative before stabilizing, with the FTSEurofirst 300 index
up 0.3 percent.
S&P 500 futures fell 3.3 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 0.25 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 gained 0.3 percent to
$30.10 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.
DSW Inc plunged 13.3 percent to $51 in light
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).
Asian shares rose more than 1.5 percent on the Greek