* FTSEurofirst 300 up 0.7 pct, hits one-week high
* Euro STOXX 50 up 1.1 pct to above 50-day moving average
* Thin volumes for 2nd day as Wall Street shut due to storm
* UBS up 13 pct in two sessions on massive job cuts
PARIS, Oct 30 (Reuters) - European shares rallied on Tuesday, led by Swiss bank UBS, which confirmed it will slash 10,000 jobs, and by oil major BP whose dividend rose for the second time in less than a year.
Volumes were thin, however, with the effects of a massive storm hitting the eastern United States forcing Wall Street to remain shut for a second day.
At 1225 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,100.90 points after rising to a one-week high of 1,103.02 points. However, half-way in the session volumes represented only a quarter of the index's 90-day daily average volume.
On Monday, the session's volumes were the lowest in nearly two months as U.S. stock markets closed due to giant storm Sandy.
Wall Street will remain shut on Tuesday, with investor attention turning to whether markets will be able to resume activity on the month's final trading day on Wednesday.
"We're a bit lost without Wall Street, frankly. It's hard to read anything in this market because volumes are so low," said Alexandre Tixier, technical analyst at TradingSat, in Paris.
"But overall, today's gains don't change the fact that the trend is simply neutral. It's not worth going 'long' or 'short' on indexes, it's just better to lower your exposure to equities to 20 percent, and focus on picking the stocks with the strongest upside momentum."
The euro zone's blue chip Euro STOXX 50 index was up 1.1 percent at 2,505 points, moving slightly above its 50-day moving average, which represents a strong resistance level. The index has been moving sideways since a high hit in mid-September.
"We need a clear break on either side, ideally with strong volumes and with a confirmation on the weekly chart to avoid false signals, before we can get out of this range-bound market," Tixier said.
"Meanwhile, it's not about indexes, not even about sectors, it's all about stock picking."
Around Europe, the UK's FTSE 100 index was up 0.8 percent, Germany's DAX index up 0.9 percent, and France's CAC 40 up 1 percent.
UBS was the top blue-chip gainer, up 5.1 percent to a 15-month high, after confirming it would wind down its fixed income business and cut 10,000 jobs. The stock has jumped 13 percent so far this week.
German rival Deutsche Bank also gained ground, up 4 percent after it posted a 20 percent rise in pre-tax profit and raised its job cut targets.
BP shares were in the spotlight, climbing 4.9 percent after the oil major hit by a huge oil spill in the Gulf of Mexico in 2010 said it will raise its dividend for the second time in less than a year, to help restore investor confidence.
The stock is still down about 33 percent from before the 2010 oil spill, while Europe's STOXX oil and gas index is down 4 percent over the same period.
Despite the positive reaction to results from BP and Deutsche Bank and to the sweeping changes at UBS, Patrice Perois, trader at Kepler Capital Markets in Paris, said there are persistent worries over the outlook for corporate results that could soon derail Tuesday's gains.
"For every 10 earnings reports, we're getting two profit warnings, which is not really reassuring" he said.
So far in the earnings season, about 37 percent of STOXX 600 companies have reported results, of which 43 percent have posted lower-than-expected earnings, while 53 percent have missed revenue forecasts, according to Thomson Reuters Starmine.