After a stellar start to the week on Monday as investors watched Tropical Storm Irma begin to fade, U.S. stocks extended their gains today. The Dow Jones Industrial Average (DJINDICES:^DJI) rose a solid 61 points, while the S&P 500 (SNPINDEX:^GSPC) delivered a similarly modest gain to close at an all-time high.

Today's stock market

Index Percentage Change Point Change
Dow 0.28% 61.49
S&P 500 0.34% 8.37

Data source: Yahoo! Finance.

Financials stocks continued to rally as the benchmark 10-Year Treasury yield climbed to 2.170% (from 2.125% late Monday), helping the Financial Select Sector SPDR Fund (NYSEMKT:XLF) rise another 1.2%. Oil stocks fared even better, with the SPDR S&P Oil and Gas Exploration and Production ETF (NYSEMKT:XOP) jumping 2.2%, thanks to rising oil prices following new data showing decreased production from Saudi Arabia in August.

As for individual stocks, cloud-based healthcare platform specialist Inovalon (NASDAQ:INOV) skyrocketed after announcing a long-term deal with UnitedHealth Group, and clothing retail giant Gap (NYSE:GPS) climbed following encouraging words from Wall Street.

Wall Street sign with stone "Exchange" building in the background

Image source: Getty Images.

Gap's "underappreciated" brand

Gap stock rose 6.4% after Jefferies analyst Randal Konik named it one of the firm's "highest conviction" picks, reiterating his buy rating and raising his per-share price target from $35 to $39. Gap closed today at $27.56 per share.

To justify his optimism, Konik argued that the market is "underappreciating" the pieces that comprise Gap's overall business. Konik elaborated that while the market is focused on its namesake concept, Gap's Old Navy business generates three-quarters of the company's total profits. And by his calculations, Old Navy alone is worth 30% more than Gap Inc.'s total enterprise value. Finally, Konik says Gap's strategic direction is aimed at enhancing its long-term value, and his data shows lower promotions across both Gap and Old Navy lately. 

For perspective, Gap shares popped earlier this week after it revised its long-term strategy to focus on fostering Old Navy and Athleta, which have both outperformed for the company in recent quarters. Gap also outlined plans to reduce expenses by roughly $500 million over the next three years, which should significantly increase margins over the same period.

With Gap shares still down around 16% from their 52-week high set last November, it's no surprise to see the market bidding up the stock on today's upgrade.

Inovalon's big new contract

Shares of Inovalon Holdings jumped 16.7% after the company announced that UnitedHealth Group subsidiary UnitedHealthcare has entered into a five-year engagement to use its Inovalon ONE Platform.

Inovalon said that UnitedHealthcare will implement Inovalon ONE to enable high-speed analytics with the aim of delivering more effective clinical insights, accelerated decision-making, and real-time data visualization for its Medicare Advantage and commercial membership base. The engagement will also drive population health programs for over 30 million U.S. UnitedHealthcare members.

"We are dedicated to delivering high-quality, cost-effective care to the people we serve," said United Clinical Services president William Hagan. "Through the implementation of Inovalon's platform we are able to achieve scale and analytical processing speeds that were not previously possible, producing important clinical insights much more quickly and helping deliver industry-leading quality to our members."

Financial terms for the agreement weren't disclosed, so investors will likely need to wait until Inovalon's third-quarter report in early November to receive more color on that. But even putting aside its financial contribution, this is a massive vote of confidence in the long-term viability of Inovalon's solutions.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.