With US Internet share prices skidding, online stockbrokers could be about to face the first downturn in their young industry.

That warning, from Wall Street's most widely followed analyst of the sector, prompted a slump in the shares of online stockbroking firms earlier this week. Most have fallen back sharply over the past three months and are now worth barely half their record highs.

The general decline in Internet stocks from their spring peak has already led to a notable drop in trading volumes in these shares, raising a warning flag over the prospects of the online brokers, said Mr Bill Burnham, an analyst at Credit Suisse First Boston.

Internet and big technology companies have been the shares most actively traded by the small investors who are the main customers of the online brokers.

Interest in these busiest shares has waned as prices have fallen - and online brokers have felt the pinch.

The volume of shares traded in the most widely followed technology companies was 54 per cent lower in July than in the record month of April, according to Mr Burnham.

The July-September period "may witness the first ever sequential decline in online trading volumes", leaving online brokers facing leaner times, said Mr Burnham.