I don't think that your password was hacked. Perhaps your system has been infected with malware / spyware. You can find a lot of free programs on internet who can help you to scan your PC. Just search "anti malware", "anti spyware" on google.
You could have opened a harmless attachment in your Email and it would have infected your PC partition. The virus attaches to your Email contacts and starts sending out Spam behind your back. First thing to do is to change your password in Hotmail.
We cannot help you with malware removal here due to forum rules. Please click on the link in my signature for Spyware Help and post there for more help.
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