UPDATE 3-Toronto stocks rally late on banks, consumer issues

(Adds details, updates figures)

*TSX index rallies late after big early selloff

*Financial, consumer stocks rebound after recent losses

*Materials issues weigh on the market.

TORONTO, July 3 (Reuters) - The Toronto Stock Exchange's main index rallied from early weakness to close more than 100 points higher on Thursday as investors scooped up hard-hit financial and consumer shares after data showing the U.S. labor market was holding up better than some had expected.

Following a steep, 400-point drop in the previous session, investors sought bargains among stocks that been hit hardest by worries about credit conditions and broader economic weakness.

The heavily-weighted financial issues sector, which has dropped 11 percent in the past two months, rose 2.51 percent during Thursday's session, led by Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research) and Bank of Montreal (BMO.TO: Quote, Profile, Research).

"I think some people are slowly wading back in there, seeing if they can get some deep discounts on some of the financials," said Andrew Martyn, portfolio manager at Davis Rea.

The S&P/TSX composite index .GSPTSE rose 109.46 points, or 0.78 percent, to close at 14,143.57.