The following information is quoted directly from www.lcms.org/faqs/denominations.
What are the major differences in doctrine between Lutheran churches and Baptist churches?
While unlike the LCMS, Baptist churches do not require subscription to a creedal statement or "body of doctrine" as such. However, one of the major doctrinal differences has to do with what the Bible teaches about Baptism and the Lord's Supper. Lutherans regard Baptism and the Lord's Supper as divinely instituted sacraments. Our confessional writings describe them as the Gospel in "visible" form. They are, therefore, at the heart and center of the Lutheran faith.
Baptist churches do not regard Baptism as a means of grace through which the Holy Spirit works to create and strengthen faith. Therefore, they reject infant Baptism. They also place great emphasis on the mode of Baptism (immersion required). Likewise, the Lord's Supper is generally regarded by Baptists as merely a commemorative meal, not a sacrament in which the body and blood of Christ is truly present in and with the bread and wine for the forgiveness of sins.
Baptist churches also typically stress the role of "free will" in conversion, and (accordingly) speak of faith in Christ as being attained through a person's "choice" or "decision." Lutherans, on the other hand, believe that faith itself is a gift of God's grace and is brought about not by the "free will" of human beings but by the power of God's Spirit working through God's means of grace, the Word and Sacraments.