NEW YORK ( TheStreet) -- Stocks finished on a mixed note Monday as the pro-bailout party's victory in Greece over the weekend provided only a fleeting dose of relief to the eurozone debt crisis.

The election results quelled immediate concerns about Greece being on a path to leave the single-currency bloc but news of rising borrowing costs for Spain kept a lid on investor enthusiasm about the outcome.

The Dow Jones Industrial Average closed lower by 25 points or 0.20%, at 12,742. Earlier in the session, the blue-chip index sank as low as 12,696 and ranged less than 90 points on the day.

The S&P 500 added about 2 points, or 0.14%, to close at 1345. From its near four-year high levels in early April through the beginning of June, the benchmark declined by nearly 10%, landing it on the threshold of a correction. Since then, it's reclaimed some ground and now sits roughly 5% below a high of 1422 on April 2.

The Nasdaq outperformed the other indices, advancing 22 points, or 0.78%, to close at 2895.

Within the Dow, 19 of the index's 30 components were moving lower, led by Alcoa ( AA), Bank of America ( BAC), General Electric ( GE), Hewlett-Packard ( HPQ), and JPMorgan Chase ( JPM).

Verizon ( VZ), Kraft Foods ( KFT), and Home Depot ( HD) were among the bigger gainers on the Dow.

In the broad market, the energy, financials and conglomerates sectors were moving lower, while transportation, healthcare and services were areas of strength.

Official projections show that Greece's pro-bailout New Democracy party holding 29.7% of votes and 129 seats in the 300-member parliament, trumping the 26.9% of votes and 71 seats obtained by the leftist Syriza party. The New Democracy Party now faces the challenge of forming a viable coalition government.

Overnight, global markets staged a relief rally in reaction to the results, but soon lost steam.

The FTSE in London settled up 0.22% and the DAX in Germany closed higher by 0.3%, substantially trimming gains. Hong Kong's Hang Seng index closed higher by 1.01% and Japan's Nikkei Average settled up 1.77%.

"A temporary relief rally in the euro and risk assets does not mean that uncertainty has been eliminated," said HSBC analysts. "Antonis Samaras, the pro-bailout New Democracy leader, has said that he, too, wants to renegotiate some of the terms of the bail-out which means that a temporary halt to Troika funding cannot be ruled out. More immediately, New Democracy needs to form a coalition involving center-left Pasok, which has suggested forming a national unity government including anti-bailout party Syriza."

There are rumors that Pasok, the party that came in third place, won't form a coalition with New Democracy unless Syriza is involved, implying that there could be no government in Greece for a while.

"The uncertainty now begins," said Paul Donovan, a global economist with UBS, in reference to the composition of the new government and how the renegotiation of Greece's bailout terms will progress.

German Chancellor Angel Merkel has already asserted that the new government should not be given any wiggle room to negotiated the terms of Greece's bailout.

A full European Union summit is slated to take place in Brussels on from June 28-29, following this week's G20 summit in Mexico, where leaders will focus on discussing ways to boost political and economic ties to bolster market confidence. Until then, "it's going to a bumpy ride," said Peter Cardillo, chief market economist at Rockwell Global Capital.

"We need to get some real concrete moves out of the euro group and I suspect that behind the scenes there is talk eventually of euro bonds, and those are things that the market wants to really see and hear," said Cardillo.

David Rolfe, manager of the RiverPark/Wedgewood Fund, pointed out that summer is in full swing, and with liquidity down, investors should expect choppiness in the markets -- "it will be a ping pong match, back and forth."

Meanwhile, the yield on Spanish 10-year bonds rose above 7% Monday amid reports that bad bank loans in the country have reached an 18-year high, sparking concerns that the country will require a full bailout.

Spanish banks may reportedly now need €150 billion, rather the €100 billion agreed to last weekend, in financial support from the eurozone.

Ahead of the Greek elections, the markets were preparing for global central bank coordination to boost liquidity, if needed, should the event lead to chaos. But investors are now doubtful that the Federal Reserve plans to make any major moves at its regular policy meeting this week, though an extension of its Operation Twist bond-maturity extension program is possible.

"There's a theory of diminishing marginal impact of more successive QE," said Rolfe. " For the Fed to act with some level of decisiveness and do something that would move the markets, there would have to be more bad economic data. I'm not seeing any stresses or fissures that would require the Federal Reserve to make any surprising moves this week."

July crude oil futures fell 76 cents to settle at $83.27 a barrel. August gold futures slipped $1.10 to settle at $1,627 an ounce.

The benchmark 10-year Treasury was up 2/32, lowering the yield to 1.575%, while the dollar was rising 0.47%, according to the dollar index.

On the U.S. economic data front, the National Association of Home Builders Housing Market Index rose to 29 for June from a revised May reading of 28, reaching its highest since May 2007. Economists surveyed by Briefing.com expected a reading of 28. Still, a reading below 50 points to negative sentiment towards the housing market.

In corporate news, InterDigital ( IDCC) has reached an agreement to sell about 1,700 patents, mainly tied to 3G, LTE and 802.11 technologies, to Intel ( INTC) for $375 million. InterDigital also said it was doubling its stock buyback program to $200 million. The stock soared more than 27%.

Infinity Pharmaceuticals ( INFI) is ending the phase 2 trials of its saridegib experimental drug to treat bone and cartilage cancers, amid disappointing results. The shares lost more than 7%.

Microsoft ( MSFT) has a media event scheduled for Monday night at which the software giant could unveil a tablet computer developed in conjunction with Barnes & Noble ( BKS).

According to TechCrunch, Microsoft has a tablet/e-reader on tap and it will be entertainment-driven. Shares of Barnes and Noble dropped more than 2.5%.

PetSmart ( PETM) has raised its quarterly dividend to 16.5 cents a share from 14 cents, an increase of 18%. The company also announced a $525 million buyback plan. Shares rose 3.5%.

Facebook ( FB) said that its chief technology officer, Bret Taylor, was departing from social networking giant to work at another start-up. The stock rose nearly 5% after being in negative territory earlier in the day.


-- Written by Andrea Tse and Shanthi Bharatwaj in New York.

>To contact the writer of this article, click here: Andrea Tse.