New York ? Wall Street sank lower Monday as disappointing sales at Wal-Mart Stores Inc. chilled the retailing sector and eroded early gains following the weekend capture of fallen Iraqi leader Saddam Hussein.

Stocks traded briskly around the globe on news that Saddam was in custody, but the rally was short-lived on Wall Street. The major indexes shot up initially but steadily retreated as investors refocused on the domestic picture. While the arrest was important news for U.S. forces in Iraq, analysts were not surprised by its limited impact on the markets.

“This is a geopolitical event that gave us a nice, short-term blip, but it wasn’t the kind of news that would drive us to even loftier levels,” said Brian Williamson, an equity trader at The Boston Company Asset Management. “The war is by no means over; this is just one piece of the puzzle, and not a cause for a huge end-of-war celebration.”

After soaring nearly 100 points in the first minutes of trading, the Dow Jones industrial average wheezed to a negative finish, ending the day down 19.34, or 0.2 percent, at 10,022.82. The broader gauges also were lower.

Overseas markets saw gains. Japan’s Nikkei stock average finished 3.2 percent higher following news of the arrest. The reaction was more muted in Europe, where major indexes lost ground but still ended the day higher. France’s CAC-40 closed up 0.6 percent, Britain’s FTSE 100 rose 0.01 percent, and Germany’s DAX index ended the day 0.4 percent higher.

“These psychological things, like the Dow crossing 10,000 and the capture of Saddam Hussein, are exactly the types of things we need to draw individual investors from the sidelines,” said Jeffrey Kleintop, chief investment strategist for PNC Advisors of Philadelphia. “At a gut level, this is one more risk that’s out of the equation.”