NEW YORK >> Wall Street is gaining ground today after a round of reports suggested the economy is in better shape than feared.

The S&P 500 was 0.7% higher in afternoon trading. It’s been generally edging lower since a five-week rally carried it to its highest level in more than a year in mid-June.

The Dow Jones Industrial Average was up 147 points, or 0.4%, at 33,864, as of 12:06 p.m. Eastern time, and the Nasdaq composite was 1.1% higher.

Airlines were helping to lead the way after Delta Air Lines said it still sees pent-up demand in the pipeline as passengers make up for lost opportunities to travel during the pandemic. It highlighted high-income customers in particular, who account for three-quarters of spending on air travel and still look to be in good financial shape despite high inflation.

Delta’s stock rose 4.9% after it said earnings this year should come in at the top end of the range it had earlier forecast. American Airlines climbed 5.7%, and United Airlines rose 5.4%.

High inflation is hurting other companies more directly, though. Walgreens Boots Alliance dropped 9.5% after it reported weaker profit for the latest quarter than analysts expected. The retail pharmacy company also cut its forecast for earnings this fiscal year, saying customers have become more cautious in their spending and are looking for more value amid high inflation.

Lordstown Motors plunged 36.3% after the electric pickup truck company filed for Chapter 11 bankruptcy protection. It had warned in early May that it was in danger of failing due to a dispute with electronics company Foxconn, which was wavering on a $170 million investment in the startup company.

The U.S. stock market has been on a tear this year despite much higher interest rates meant to get inflation under control, in part because the economy has so far managed to avoid a recession. But many investors are just delaying their predictions for the start of a recession rather than canceling them.

Data recently has been mixed, with a resilient job market propping up weakening manufacturing and other areas of the economy.

Reports today were largely stronger than expected. Readings on consumer confidence, sales of new homes and orders for long-lasting manufactured goods all topped economists’ forecasts.

A measure of manufacturing activity in the Richmond, Virginia, region stretching from Maryland to South Carolina contracted, but not by as much as economists feared.

All the economic data will feed into decisions by the Federal Reserve and other central banks about whether to keep cranking interest rates higher. High rates can undercut inflation, but they do so by slowing the entire economy and raising the risk of a recession.

Christine Lagarde, the head of the European Central Bank, warned today that inflation is declining slowly and pledged to raise rates high enough “to break this persistence.” She once again made it seem nearly certain the central bank will raise rates again in July.

That’s also the expectation for the Federal Reserve. But the hope on Wall Street is that a hike next month could be the final one for the Fed, even if it has suggested recently that it could raise rates twice more this year.

Traders have largely given up on hopes of multiple cuts to interest rates in 2023, something that many were predicting earlier this year.

“We believe central banks have more work to do,” said Andrew Patterson, senior international economist at Vanguard. “We’ve always said inflation wouldn’t come down magically, even as post-pandemic supply chain issues were resolved.”

In Asian markets, stocks in Shanghai rose 1.2% China’s No. 2 leader, Premier Li Qiang, said economic growth has accelerated and can hit this year’s official 5% target. Li, speaking at a conference, gave no growth rate for the latest quarter but said it is faster than the previous quarter’s 4.5%.

Stocks also jumped 1.9% in Hong Kong, though they were more muted elsewhere in Asia and across Europe.

In the bond market, the yield on the 10-year U.S. Treasury rose to 3.76% from 3.72%. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for the Fed, rose to 4.75% from 4.74% late Monday.

AP Business Writers Matt Ott and Joe McDonald contributed.