May 18 (Bloomberg) -- Canadian stocks rose, led by Royal Bank of Canada, on expectations the pace of economic growth and corporate profits this year won't slow. Alcan Inc. climbed after the company said it would sell shares in a new unit.

The Standard & Poor's/TSX Composite Index added 39.19, or 0.5 percent, to 8162.69 in Toronto. Seven of the benchmark's 10 industry groups advanced, and seven stocks rose for every five that fell.

``The economy is still getting stronger and earnings growth is still strong,'' said Gavin Graham, director of investments at Guardian Group of Funds in Toronto, which manages the equivalent of $2.65 billion in assets. ``With earnings growth and job creation, the market is fairly valued.''

The U.S. economy, the endpoint for 85 percent of Canada's exports, added 288,000 jobs in April, more than expected, a U.S. government report showed earlier this month. March's gain of 308,000 was the biggest monthly increase since April 2000.

Royal Bank of Canada, the country's largest bank, gained 93 cents to C$60. Research In Motion Ltd. added C$9.36 to C$139.11.

Alcan climbed C$1.68 to C$53.18. The world's second-largest aluminum maker plans to spin off to shareholders almost all the rolled-products businesses the company held before completing its acquisition of Pechiney SA in February. The new business will be the world's largest aluminum-rolling company by revenue, with annual sales of $6 billion and 10,000 employees, Montreal-based Alcan said in a statement distributed by Canada NewsWire.

These stocks made significant gains or losses. The stock symbol is after the company name:

Magna International Inc. (MG/A CN) rose C$1.48 to C$105. The company, Canada's largest auto-parts maker, agreed to buy a unit of DaimlerChrysler AG that makes drive-train systems for $435 million.

South Atlantic Ventures Ltd. (SAA CN) fell 50 cents, or 5.6 percent, to C$8.50. The miner said its loss in the first quarter widened to 8 cents a share from 5 cents a year earlier.

Alcan Inc. (AL CN)
Research In Motion Ltd. (RIM CN)
Royal Bank of Canada (RY CN)

To contact the reporter on this story: Matt Mossman in Toronto at at mmossman@bloomberg.net

Last Updated: May 18, 2004 16:23 EDT