The Italian rider, runner-up to Cavendish in yesterday's opening route, went one better for his Bardiani team on the 171.4km stage between Tilisarao and Terrazas del Portezuelo.
Leigh Howard (Orica GreenEdge) scooped third, while Peter Sagan once again missed out on the top spots, finishing fifth.
Three breakaway riders - Martin Hacecky, Ben Jacques-Maynes and Leandro Messinio - almost managed to go it alone, but were caught with just 4km of the stage to go.
Cavendish's Omega Pharma-Quick Step team were at the front of the peloton, spearheading the chase, only for Modolo to pounce in the sprint.
The race now moves into the climbers' territory, with a 173.1km stage between La Punta and Mirador del Potrero.
The seven-stage event concludes on Sunday.