US STOCKS-Market rises as falling oil offsets earnings woes

                                
 * Oil drops over $3/barrel, reducing consumer fears
                                
 * Coca-Cola, Wal-Mart, Caterpillar lift the Dow
                                
 * Apple leads tech sell-off on poor outlook
                                
 * Dow and S&P up 0.4 pct, Nasdaq up 0.1 pct
 (Updates to mid afternoon)
                                
 By Walter Brandimarte
                                
 NEW YORK, July 22 (Reuters) - U.S. stocks gained on
Tuesday as oil prices slid over $3 a barrel, tempering
concerns about corporate results, despite a disappointing
earnings outlook issued by bellwether Apple.
                                
 U.S. front-month crude <CLc1> dropped about 2.4 percent,
or $3.09, to settle at $127.95 a barrel as the U.S. dollar
rose, reducing worries about the impact of higher energy costs
on consumers and businesses.
                                
 Consumer stocks like Coca-Cola <KO.N> and Wal-Mart <WMT.N>
gained as oil prices tumbled and helped lift the Dow.
                                
 But investors remained jittery about the prospects for the
U.S. economy and consumer spending, especially after a batch
of disappointing results, including those of credit card
company American Express <AXP.N>, which plunged 9.6 percent to
$36.97.
                                
 Shares of Apple <AAPL.O> were the top drag on the Nasdaq
and among the S&P's leading decliners after the maker of the
iPod and the iPhone said late on Monday its current-quarter
earnings will be well below Wall Street's targets.
                                
 "When you see the pressure on oil prices abate like we've
seen today, certainly that gives a temporary relief, but it
seems that the long-term pressure for increases in oil prices
still exists," said Colleen Supran, portfolio manager of San
Francisco-based Bingham, Osborn & Scarborough, with $2.1
billion in assets under management.
                                
 "More importantly, I think are the unknowns around what's
going to happen to corporate earnings, based both on the
(recent) increase in oil prices and on the reduction in
consumer spending that might be expected going forward," she
added.
                                
 The Dow Jones industrial average <.DJI> rose 41.12 points,
or 0.36 percent, to 11,508.46, and the Standard & Poor's 500
Index <.SPX> gained 5.45 points, or 0.43 percent, to 1,265.45.
The Nasdaq Composite Index <.IXIC> was up 3.26 points, or 0.14
percent, at 2,282.79.
                                
 Coca-Cola shares gained 2.9 percent to $51.04 on the New
York Stock Exchange, while Wal-Mart rose 2.1 percent to
$58.50.
                                
 Caterpillar <CAT.N> shares rose 1.8 percent to $74.54
after the maker of heavy construction equipment posted a
stronger-than-expected quarterly profit.
                                
 Shares of General Electric Co <GE.N> rose 2.3 percent to
$28.32 after the conglomerate and Abu Dhabi investment agency
Mubadala Development Co said they had entered into an $8
billion joint venture. [ID:nN22192906].
                                
 Wachovia <WB.N> initially dropped more than 10 percent
after the fourth-largest U.S. bank said it would slash its
dividend, but shares rebounded when the company said it did
not plan to sell new shares to raise capital.
                                
 Wachovia's stock jumped 17.3 percent to $15.46.
                                
 On the downbeat side, Apple's stock lost 4.6 percent to
$158.61 on the Nasdaq.
 (Editing by Jan Paschal)