Evolution is the result of multiple forces. Mutation and gene flow add variation to a population (mutation creates variation; gene flow imports it from elsewhere). Selection and drift change the ratios of existing variations (selection chooses the "best"; drift is random fluctuation between equally viable variations.) When two different subgroups of a population go through the process separately, over time they can diverge enough to no longer be able to interbreed, and therefore become separate species.
There are those who believe selection works within a species, while simultaneously believing the process as a whole breaks down or is inadequate on some larger scale.
> Natural selection only chooses from existing variations.
No, this is wrong. What we call "natural selection" includes the effect of various sources of genetic mutation. It is by this process that selection (the entire process) does create new genetic information.
Another way to say this is that, without identifying and addressing sources of mutation, natural selection would not be a complete theory.