You can help the soil maintain moisture by heavily mulching your tomatoes. Our community garden provides bales of marsh hay for garden mulch. Use "slabs" of hay around the base of the plant to both maintain even moisture between watering, to protect the soil from erosion and to keep weeds to a minimum. Straw, plastic and any number of other materials work as well. Wood chips are not good for annual plants such as tomatoes, wood consumes nitrogen from the soil as it decomposes, stealing it from your plants.
If a plant receives excess water, the roots can’t breathe, and will rot. The gardening Web site Suite101.com says, “Over watering also leads to fungal diseases and mold. Once root rot begins the plant will start to die, but if it’s caught early enough, it can be saved. Signs of over watering include: wilting, yellow leaves, mushy stems and mold growth on the soil.”
Check out the rest of this excellent article on proper tomato watering techniques.