With no spark, as Dan says, it's either a broken timing belt, not turning the distributor, or it's in fact a bad distributor itself.

I put a new Bosch distributor in our 88 740GLE 2 years ago. End of problem, same symptoms as this car. Actually had a few cut-out and re-start events first, but finally died completely. New dist and it's been 100% reliable since. Now at 220K miles.
If the black plug at the bottom of the dist body is at all crusty looking, it's the most likely candidate. And remember with Volvos, if there's no ignition pulse, the fuel injection computer doesn't turn on the pumps, so there will be no fuel either.
But I'd verify the timing belt first thing- look in the oil cap as someone cranks the engine, it should be turning in there. If that's good, go looking for a 1985-88 740 distributor.

Good luck!
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Rob Bareiss, New London CT ::: '87 244DL/M47- 229K, 88 744GLE- 218K, 82 245T-181K Also responsible for the care and feeding of: 88 745GLE, 231K, 87 244DL, 239K, 88 245DL, 246K