NEW YORK, AUG. 24 -- Stock prices drifted lower today in the slowest trading in eight weeks as traders cashed in some of their holdings after last week's rise to new highs.

The Dow Jones average of 30 industrials dropped 12.43 to 2697.07.

Volume on the New York Stock Exchange came to 149.35 million shares, down from 189.58 million Friday and the smallest total since a 142.29 million-share day on June 29.

Analysts said concern over the recent weakness of the dollar in foreign exchange was dampening investors' enthusiasm.

As the dollar has declined, long-term interest rates in the bond market have climbed back to around their highs of last spring.

Both short-term and long-term rates moved up a bit in the government securities markets today.

But observers noted that selling of stocks was not especially intense. They said it appeared that the market was simply taking a pause after a strong summer-long rally, and that many participants were on vacation.

Other than a report Tuesday on durable goods orders for July, there is little economic news scheduled to be issued by the government this week.

Tobacco stocks were actively traded after rising strongly Friday on word of a court ruling in favor of the industry on a key point in a product liability case.

American Brands slipped back 7/8 to 54 1/2 after a 2 7/8-point rise Friday.

RJR Nabisco, up 1 1/4 at 65 1/2, and Philip Morris, up 1 5/8 at 113 1/8, added to their Friday gains.

Energy issues declined broadly as oil prices came under continuing downward pressure.

Chevron lost 1 1/4 to 58 1/8; Exxon 1 1/8 to 97 7/8; Mobil 1 to 50; Texaco 7/8 to 42 1/4, and Atlantic Richfield 1 1/2 to 91. Crude oil futures for October delivery dropped 30 cents to $18.60 a barrel on the New York Mercantile Exchange.

Other losers among the blue chips included Merck, down 1 1/2 at 205 1/2; International Business Machines, down 1/8 at 174 5/8; General Electric, down 1 1/8 at 64 1/2, and American Telephone & Telegraph, down 1/2 at 34 1/4. AT&T led the active list.

Declining issues outnumbered advances by about 9 to 5 on the NYSE.

The exchange's composite index of all its listed common stocks dropped 1.24 to 186.27.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 176.57 million shares.

Standard & Poor's index of 400 industrials fell 3.26 to 389.08, and S&P's 500-stock composite index was down 2.57 at 333.33.

The Nasdaq composite index for the over-the-counter market lost 1.40 to 453.80.