Which important musical by leonard bernstein and stephen sondheim updates romeo and juliet to highlight racial tensions in new york city?

The answer is: West Side story

The west side story revolves around the lives of blue collar workers in new york  in early 1960s.

At that time, many immigrants from various backgrounds come and live in new York seeking job opportunities. Racial tension arise when local people feel that the immigrants started taking the available jobs and increase the rate of their unemployment.

horror and alarm

this is shown in the exserp then he beat at the door and called, but none responded, and for wrath he could have dashed the door down, but it was too stout, and he had no weapon; for his arms had been taken from him.when it was dark, suddenly it seemed to sir lancelot that the room smelled foul, as if he had been carried into the midst of the quaking marsh, and was sunk deep in the slime and weeds of a pool. then, through the arrow-slit, he saw many strange lights come, dim and blue like the wild lights that dance and flit over the lonely marshes by night; but that which made him   marvel was that these lights were two together, as if they were the eyes of evil things. and they came up to him with a breath that was cold and dank, and they seemed to peer into his face, but he could see naught of their bodies. the hair upon his head rose, and his skin went cold. they pressed all about him, and to defend himself he struck at the eyes, but his blows beat only the air. then suddenly sir lancelot felt sharp pains, as if small keen knives had been thrust into his flesh at many places. the stabs increased in number and in pain, and sir lancelot beat about himself and ran to and fro in the narrow chamber to escape   the evil eyes and the stabs, but it was in vain, and thus all night in much misery he suffered. when for sheer weariness he lay down and tried to close his eyes, the evil things would not let him, but ever they tore at him and stabbed him.