Perform Sum In Update Statement
One way is to calculate the aggregate inside a CTE (I blogged about this last month):

;WITH CTE AS 
(
  SELECT time1, time2, t2 = SUM(time1) OVER()
  FROM #abcd
)
UPDATE CTE SET time2 = t2/60/60;


But I don't understand the value of putting the same SUM(), aggregated over the whole table, into that column for every single row. Seems easier to just store this single value in a variable, or calculate it at runtime (just use the query inside the CTE).