While neutering your dog prevents him from impregnating females, it is not a cure for all sexual behavior. A dog may retain his sexual desire even though he can no longer procreate. Male dogs may become visibly aroused, and may even go on mounting other dogs and engaging in sex acts. Generally, the behavior ceases, sometimes not immediately.
According to the ASPCA, it is normal for a neutered dog to become aroused and act sexually. This may include getting an erection, mounting -- including dogs, people, and objects like toys and furniture -- and even climaxing. Typically, this is the result of a habit that formed before he was neutered, as he has had time to learn that sex is physically pleasurable. Whether he is masturbating or mounting a partner, your dog can become aroused, act on his arousal and ultimately ejaculate just like an intact dog -- he just won't get anyone pregnant as a result.