US STOCKS-Dow, S&P at new highs; hedge fund stakes boost J.C. Penney


* J.C. Penney, FedEx gain on hedge fund stakes

* NY factory index falls in Nov to weakest since May -NY Fed

* Twitter options begin trading

* Indexes up: Dow 0.3 pct; S&P 0.1 pct; Nasdaq 0.1 pct

By Luke Swiderski

NEW YORK, Nov 15 (Reuters) - The Dow and the S&P 500 reachednew highs on Friday a day after U.S. Federal Reserve Chairnominee Janet Yellen told a Senate Committee that the central bank's economic stimulus wouldcontinue and several key important investors disclosed stakes incompanies like J.C. Penney and Exxon Mobil.

A number of big hedge funds made bets on the turnaround of ailing department store J.C. Penney Co, sending itsshares up 5.4 percent to $9.16.

Gains by the broader market were limited, however, with bothindexes on track for a sixth consecutive week of gains and theS&P 500 within eight points of 1,800, its next level ofpotential resistance. The Nasdaq 100 index was near a13-year high.

Still, "I think there is a general expectation that themarket is going to continue to rally for the rest of the year...retail investors are starting to move back in, and I thinkthat's providing a fair amount of support" said Brad McMillan,chief investment officer for Commonwealth Financial, based inWaltham, Massachusetts.

Shares of Exxon Mobil Corp led the blue chip Dowindex higher. The stock rose 1.2 percent to $94.32 a day afterWarren Buffett's Berkshire Hathaway Inc disclosed a new $3.45 billion stake in the world's largestpublicly traded oil company.

FedEx Corp shares added 1.3 percent to $138.19 after regulatory filings showed funds including Daniel Loeb'sThird Point LLC, George Soros' Soros Fund Management LLC andJohn Paulson's hedge fund, Paulson & Co all took stakes in thecompany.

"Going forward, I'm keeping an eye on the 1,120 area on theRussell 2000, as small-cap leadership would be a good sign forrisk appetite," said Bryan Sapp, senior trading analyst atSchaefer's Investment Research in Cincinnati.

The Dow Jones industrial average rose 48.43 points or0.31 percent to 15,924.65, the S&P 500 gained 2.11 pointsor 0.12 percent to 1,792.73 and the Nasdaq Composite added 5.428 points or 0.14 percent to 3,978.168.

InterCloud Systems Inc shares surged 193 percent to$7.49 after the cloud and consulting services said its quarterlyrevenue rose five-fold to $16.2 million.

Following Twitter's trading debut on the New YorkStock Exchange on Nov. 7, options market makers began pricingand trading contracts Friday to buy or sell Twitter shares atvarious prices in the future.

Data showed New York state's manufacturing sectorunexpectedly shrank this month while U.S. industrial productionfell in October as output at power plants and minesdeclined.

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