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Yes, ABS problems will cause the cruise control to stop working.
Very common problem.
All the ABS control units (Installed on 96 and newer 850, 70 series and S80 models) will eventually fail after they reach 65,000 miles or 5 years. The average is 85,000 miles and/or 6 years for failures.
The erratic ABS light and/or no trouble codes is an indication of a defective ABS unit.
A dealer will charge from $60.0 to $120.00 to diagnose the problem and about 95% of the cases the mechanic will recommend to replace the ABS control unit.
Here's more information on this issue and a replacement alternative.
Vitor's Volvo ABS website
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