European stocks were down by midday on Tuesday as worries about banks' vulnerability to credit market turmoil and the U.S. subprime crisis returned to center stage after a sharp rally in the previous session. At 1033 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,508.61 points with Swiss bank UBS the top weighted percentage decliner after it warned market turmoil was likely to hit its investment banking business in the second half.UBS shares were down 3.5 percent after it said that if turbulent conditions prevailed throughout the third quarter, it would probably see "a very weak trading result in the investment bank."
The update, which also sent other financial stocks lower, was the first by a big bank since last week's turbulence in global markets forced central banks to pump cash into the financial system.
BNP Paribas was down 1.5 percent, Societe Generale down 1.6 percent and Deutsche Bank down 1.8 percent.
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