* Cites weaker US economic data as reason for target cut
* Lowers 2012, 2013 earnings outlook on S&P 500 companies
* Recommends energy sector on likely oil price rise
July 2 (Reuters) - UBS Securities slashed its year-end target on the S&P 500 index to 1,375 from 1,475, citing weaker economic data and concerns that the U.S. Supreme Court's ruling on healthcare reforms will cause greater partisanship ahead of key fiscal discussions.
The U.S. Supreme Court upheld President Barack Obama's healthcare law on Thursday in an election-year triumph for him and fellow Democrats who championed the most sweeping overhaul since the 1960s of the unwieldy U.S. healthcare system.
"One of the most important catalysts for our changed view is the Supreme Court decision on health care, which we believe will result in a more partisan debate over end-of-year issues such as the fiscal cliff and debt ceiling," UBS said.
UBS, whose latest target suggests the S&P 500 index could rise just about a percent from its Friday close of 1362.16 points, said the sovereign debt crisis in Europe was still a concern as much work remained to be done to resolve the issues plaguing the continent.
"Long-term growth concerns stemming from the precarious fiscal situations in the U.S. and Europe will continue to weigh heavily on stock valuations," UBS strategists, including Jonathan Golub, wrote in a note to clients.
The U.S. economy grew only modestly in the first quarter, underscoring its vulnerability as global growth slows. Gross domestic product rose at a 1.9 percent annual rate. The growth pace marked a sharp drop from the fourth quarter's 3 percent advance.
"Increasingly, investors are coming to the conclusion that the biggest threat to economic and market success is not a liquidity shock, but rather a period of extended slow growth on a global basis," UBS wrote in its U.S. equity strategy report.
The brokerage lowered its 2012 and 2013 earnings estimates on S&P 500 companies to reflect moderate U.S. growth, additional dollar strength and a more difficult operating environment for financials.
It cut its earnings-per-share estimate on S&P 500 companies to $103.50 from $105 for 2012, and to $110 from $113 for 2013.
UBS recommended energy stocks on expectations that oil prices will rise on supply and demand dynamics, despite muted economic growth.