We present a novel optimization-based algorithm for motion planning in dynamic environments. Our approach uses a stochastic trajectory optimization framework to avoid collisions and satisfy smoothness and dynamics constraints. Our algorithm does not require a priori knowledge about global motion or trajectories of dynamic obstacles. Rather, we compute a conservative local bound on the position or trajectory of each obstacle over a short time and use the bound to compute a collision-free trajectory for the robot in an incremental manner. Moreover, we interleave planning and execution of the robot in an adaptive manner to balance between the planning horizon and responsiveness to obstacle. We highlight the performance of our planner in a simulated dynamic environment with the 7-DOF PR2 robot arm and dynamic obstacles.