What Happened in the Stock Market Today

Image source: Getty Images.

Stocks posted significant gains on Tuesday, as the Dow Jones Industrial Average (^DJI 0.39%) approached the 20,000 point mark for the first time and the S&P 500 (^GSPC 0.33%) index rose by over 0.5% to touch a new record.

Today's stock market:

Data source: Yahoo! Finance.

Gold prices were in focus as the Federal Reserve kicked off its two-day meeting to consider raising interest rates for the first time in a year. A slight uptick in the precious metal produced a 5% bounce for the highly leveraged Direxion Daily Gold Miners Bull 3X ETF (NUGT 1.56%). Meanwhile, the Financial Sector Select ETF (XLF 0.79%) continued its month-long rally with an additional 0.3% boost. 

As for individual stocks, Inovalon (INOV) and Organovo Holdings (ONVO 11.61%) both stood out with large price moves on Tuesday.

Inovalon loses a contract

Inovalon slumped 36% after the cloud-based analytics solutions provider slashed its full-year sales and earnings outlook. A large, multi-year contract in the healthcare industry, which management had felt confident about winning just a few weeks ago, fell through just days before the company aimed to close the deal. "This is certainly not the situation we expected or desired," CEO Keith Dunleavy said in a press release .

Image source: Getty Images.

The deal's collapse had nothing to do with Inovalon's service offerings, executives explained, but instead was driven by a "material development" with the client that got in the way. Inovalon had been preparing for the contract for the better part of a year, and it would have brought in $40 million of revenue in the fourth quarter. As things sit now, the company can't tell if the contract will occur sometime next year, if at all.

As a result, Dunleavy and his team see sales coming in at $427 million this quarter, rather than the $480 million they projected in early November. Likewise, profits will be much lower than expected, with net income of $26 million, or roughly half the previous forecast. Executives sought to stress the positive in the situation -- namely, that the deals they are pursuing are big enough to significantly swing sales and profits. Investors were caught on the losing end of that proposition this time, though.

Organovo highlights printed tissue success

Organovo, which specializes in 3D bioprinting, jumped by as much as 15% before settling down to a 12% rise for the day. The rally followed data released by the company showing encouraging early preclinical results for its 3D printed liver tissue. Recent trial implants in mice were well tolerated by the animals, Organovo revealed. "Our preclinical data show rapid vascularization and tissue engraftment, and evidence of function and durability of our 3D bioprinted human liver tissue over several weeks," Chief Strategy Officer Eric David said in a press release.

The company is still years away from being able to file a new drug application with the FDA on the technology, and so this news doesn't impact either its short-term or long-term business outlook. Yes, Organovo sees a massive potential market for its products. But for now, the company expects to post less than $6 million of annual revenue this year while it burns through as much as $34 million. Its products are currently used only in toxicology and other preclinical drug testing, which severely limits their revenue potential.