Soaring Internet stocks lifted US shares in very thin trading on the first day of trading since Christmas pulling the technology-heavy Nasdaq to reach a new record high.

The strong performance on Internet stocks - described by investors as a mild Santa Claus rally - was fuelled by a report by a consulting firm which said that Christmas shopping online more than tripled this year from 1997 levels.

The blue-chip Dow Jones industrial average gave up early gains finishing up 8.76 points at 9226.75. The Nasdaq broke a new high to close up 17.26 points at 2180.29, just eight points higher than last Wednesday's record.

"The feeding frenzy continues in the Internet electronic commerce area," said James Volk, co-director of institutional trading at D.A. Davidson and Co. in Portland, Ore.

SkyMall emerged as the most active Nasdaq issue after the in-flight retailer reported that Internet sales have more than tripled in the fourth quarter to $1m, up from $300,000 a year ago. Its shares closed at $35.56.

Other Internet stock headliners were America Online (AOL), Amazon.com, the online book, video and music retailer and Yahoo!, the most popular site on the World Wide Web.

AOL shares close at £157.25, Yahoo at $275.50 and Amazon.com at $352.