* 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
NEW YORK, Nov 15 (Reuters) - The Dow and the S&P 500 reached new highs on Friday a day after U.S. Federal Reserve Chair nominee Janet Yellen told a Senate Committee that the central bank's economic stimulus would continue and several key important investors disclosed stakes in companies 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 its shares up 5.4 percent to $9.16.
Gains by the broader market were limited, however, with both indexes on track for a sixth consecutive week of gains and the S&P 500 within eight points of 1,800, its next level of potential resistance. The Nasdaq 100 index was near a 13-year high.
Still, "I think there is a general expectation that the market is going to continue to rally for the rest of the year... retail investors are starting to move back in, and I think that's providing a fair amount of support" said Brad McMillan, chief investment officer for Commonwealth Financial, based in Waltham, Massachusetts.
Shares of Exxon Mobil Corp led the blue chip Dow index higher. The stock rose 1.2 percent to $94.32 a day after Warren Buffett's Berkshire Hathaway Inc disclosed a new $3.45 billion stake in the world's largest publicly traded oil company.
FedEx Corp shares added 1.3 percent to $138.19 after regulatory filings showed funds including Daniel Loeb's Third Point LLC, George Soros' Soros Fund Management LLC and John Paulson's hedge fund, Paulson & Co all took stakes in the company.
"Going forward, I'm keeping an eye on the 1,120 area on the Russell 2000, as small-cap leadership would be a good sign for risk appetite," said Bryan Sapp, senior trading analyst at Schaefer's Investment Research in Cincinnati.
The Dow Jones industrial average rose 48.43 points or 0.31 percent to 15,924.65, the S&P 500 gained 2.11 points or 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 quarterly revenue rose five-fold to $16.2 million.
Following Twitter's trading debut on the New York Stock Exchange on Nov. 7, options market makers began pricing and trading contracts Friday to buy or sell Twitter shares at various prices in the future.
Data showed New York state's manufacturing sector unexpectedly shrank this month while U.S. industrial production fell in October as output at power plants and mines declined.