Updated from 4:14 p.m. EDTStocks plunged for a second day Thursday as rising tensions in the Middle East pushed oil to an all-time high. The Dow Jones Industrial Average tumbled 166.89 points, or 1.52%, to 10,846.29, and the S&P 500 dropped 16.31 points, or 1.3%, to 1242.29. The Nasdaq Composite lost 36.12 points, or 1.73%, to 2054.11. The averages steadily weakened amid a steady stream of news from Israel, where the army has launched raids into Lebanon in an effort to dislodge Hezbollah militants who kidnapped two Israeli soldiers Wednesday. The biggest swoon of the session followed reports that Hezbollah fired a missile into the Israeli port city of Haifa. No injuries were reported. Over the last two sessions, the Dow has lost 288 points, or 2.6%, and the Nasdaq plummeted 75 points, or 3.5%. The S&P 500 had a two-day decline of 30 points, or 2.4%. "Investors have worries about earnings, geopolitical stories dominating the headlines and another layer of energy problems," said Barry Hyman, equity market strategist with EKN Financial. "These higher energy prices are enforcing an inflationary story. We're seeing very damaged sectors that are breaking technical levels." The Philadelphia Semiconductor Sector Index reversed a morning gain and finished down 1.4%. Chipmaker Intel ( INTC) disclosed plans to eliminate 1,000 manager positions as part of a restructuring plan. Intel slid 16 cents, or 0.9%, to $17.72. On Wednesday, a 2.7% drop in the chip group kept tech stocks underwater. The S&P Retail Index finished down 0.9%, extending Wednesday's 2.5% drop. The Amex Airline Index tumbled 6.1%, the Dow Jones Transportation Average was down 2.7%, and the Nasdaq Biotech Index slid 2%. Oil surged as Israel bombed Beirut's airport and explosions reportedly closed two pipelines in Nigeria. Reuters was also reporting that a fire at a Venezuelan refinery was closing off about 300,000 barrels of daily production. August crude rose to a record close, finishing up $1.75 to $76.70 a barrel in Nymex trading. "The various geopolitical tensions have led to safe-haven moves to Treasuries and oil, weakening equity markets," said John Canavan, a market analyst with Stone & McCarthy Research Associates. About 1.78 billion shares changed hands on the New York Stock Exchange, with decliners outpacing advancers by a 3-to-1 margin. Volume on the Nasdaq was 2.06 billion shares, with decliners beating advancers 4 to 1. The 10-year Treasury bond rose 7/32 in price to yield 5.07%, and the dollar fell against the yen and euro.