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Stocks open slightly higher after strong Tuesday

Stocks opened slightly higher on Wall Street Wednesday as investors digested the Federal Reserve's somewhat upbeat outlook on the economy that helped push stocks to multi-year highs on Tuesday. It was stocks' strongest session so far this year.

Shortly after the opening bell, The Dow Jones Industrial Average, which closed well above 13,000 Tuesday, was up 0.17 percent. The broader Standard and Poor's 500 gained 0.05 percent and the Nasdaq rose 0.17 percent.

The Fed said Tuesday that most of the largest U.S. banks passed their annual stress test in a report that underscored the recovery of the financial sector but called out a few laggards, including Citigroup Inc.

Banks have been a leading component of the 11 percent rally in the S&P for the year, with the KBW Bank index up more than 20 percent and the S&P financial sector index up more than 18 percent.

Late in Tuesday's session, the Fed also said it expects "moderate" growth over coming quarters with the unemployment rate declining gradually versus the "modest" growth the central bank said it expected in January.

In other bank-related news, Greg Smith, a Goldman Sachs executive director, said he will quit the bank, calling the current environment at the firm 'toxic.'

The increasing optimism on the U.S. economy helped boost the dollar, which hit an 11-month high against the yen and 1-month high versus the euro.

Swiss drugmaker Roche Holding AG said it received a request for additional information from the Federal Trade Commission related to its $5.7 billion hostile bid for U.S. gene decoder Illumina Inc.

European shares rose to reach fresh 33-week highs, led by financials as Fed improved its economic outlook for the world's largest economy and said most U.S. banks had passed its stress tests.

Asian shares advanced as upbeat U.S. economic data plus signs of improving capital positions at big American banks stoked appetites for risk.

Reuters contributed to this report.