The price swings that have been driving investors from Internet stocks are taking a toll on their favorite trading vehicles--online brokerage firms.

Two leading analysts today released reports showing that the major online brokers, which have tracked the double-digit growth of Internet stocks, are cruising for their first decline ever. The reports, which are expected to be reinforced by several more this week, sank the stocks of E-Trade Group Inc., Charles Schwab & Co., Ameritrade and other major firms.

The number of trades at those companies rose only slightly from June to July and is actually lower than it was in April, according to Bill Burnham of Credit Suisse First Boston. Trading volume may well decline in the third quarter, he said.

"Weakness in Internet stocks appears largely to blame," Burnham said, noting that the volume of the 40 Internet stocks he tracks fell 54 percent from April to July.

James Marks, a managing director at Deutsche Bank, comes to a similarly bleak conclusion. From April through June, he says in his new report, the leading brokers handled 633,000 trades a day--an increase of 9 percent from the first quarter. By contrast, volume grew 47.9 percent in the first quarter.

Both analysts believe the slump will be temporary. "We don't expect a recovery until late October or early November," Burnham said.

Those words shot directly to Wall Street. Shares of Schwab, the biggest Internet broker, fell 12 percent, to $37.50. The stock is down 30 percent since July 2.

E-Trade slipped 15 percent, to $24.68 3/4. That's a 38 percent decline for the month. Following its 11.5 percent decline today, to $21.25, Ameritrade is down 41 percent since July 2.

The plunge in online broker stocks came on a skittish day for the markets, which are wary of a jobs report to be released on Friday that could show the economy may be growing fast enough to warrant an interest rate increase. The Nasdaq declined for a fourth day today, closing down 35.64 points, or 1.4 percent, at 2587.99. The Dow Jones industrial average seesawed to a gain of 0.3 percent, closing at 10,677.31. And the Standard & Poor's 500-stock index slipped only 0.4 percent overall, to 1322.18. Schwab was one of the two biggest declining stocks in the S&P index.

The brokerages generally guard their quarterly figures, releasing only annual statistics. Martha Deevy, senior vice president of Schwab's electronic brokerage, said she is studying the effects of seasonality on the numbers, but did not dispute the findings. "This is probably not an inaccurate portrayal of the industry," she said.

People who trade online have a penchant for Internet stocks--and those issues have been slipping since mid-April. "There's no doubt in my mind that 'day traders light' got badly hurt," Marks said.

"Day traders light" is Marks's term for the 250,000 people he estimates use online brokers. That's not to be confused with the hard-core day traders who rent a desk and a high-speed machine from about 100 offices that host an estimated 5,000 high-volume, do-it-yourself investors.

Marshall Acuff, the chief market strategist at Salomon Smith Barney Inc., is even more pessimistic. "Day traders," he said, "are about to go over Niagara Falls."

But even he calls the trend a pause. "Online trading is here to stay," he said. "Internet investors are taking a breather after taking a pounding."

The industry has become a formidable force in its short life. Assets at the 10 largest online brokerages amounts to $1.3 trillion, according to the Deutsche Bank report. In comparison, all the banks in the nation together have $3.7 trillion in insured deposits.

E-Trade, the report said, continues to grow the fastest, thanks to its aggressive marketing efforts. Its accounts grew by 43 percent, though its clientele is less wealthy than the average investor. While the average online account contains $50,000, and Schwab customers have $96,000 apiece, E-Trade's average account holds $26,000.

CAPTION: SLOWER PACE

(This graphic was not available)