* 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: Quote, Profile, Research) and Wal-Mart (WMT.N: Quote, Profile, Research) 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: Quote, Profile, Research), which plunged 9.6 percent to $36.97.