The problem is that somehow this spoof email is able to get all my contacts and send spam email to everyone. I don't know how to stop that. I just received more spam email today from myself as did several people from my email contact list.
This new information might change things a bit.
It is still possible that the spam messages are still just spoofed messages, but the fact that people from your contact list are getting messages make it likely that there is an infection involved somewhere (while it still could be on your Mac, there reality it that it is more likely on a Windows computer…just more malware out there for Windows than for Macs)…or maybe that your Hotmail/MSN account got hacked (I believe that Hotmail/MSN has had this type of problem in the past).
For these several other people that got spam messages that appeared to come from you, would any of them likely have everyone who got a spam message in their email contact lists? The reason to ask this question is to try to determine where the compromised email contact list might have been…on your computer or on someone else's computer who had you in their contact list. At this point, you are certainly on that list, but so could someone else who got those messages. In other words, while it could be an infection on your computer, it could actually be an infection on one of your friend's computer that then resulted in spam messages to you and other using your spoofed email address as the sender since your email address would have been in the friend's email contact list. This is a rather common tactic of certain kinds of malware infections (i.e. use an email list found in the contact list of the infected computer…not email address of the owner of the infected computer).
The other overall question to ask is do you ONLY use the MS Outlook email client on your Mac to access your Hotmail account? Or do you sometimes use a web browser to access your email account? Also, does your contact list sync in any way to your Hotmail account or did you "upload it" to your Hotmail account? This is to try to determine if it is possible that your Hotmail account was hacked. Even if it was hacked, then you likely did all you needed to do by changing your password. It is possible that even if they no longer have access to your email account, if they got your contact list from the account, then they can spam those addresses with spoofed messages.
To be honest, at this point, my bet is that someone you know might have been infected. The fact that only SOME of the people on your contact list got spam messages suggests that you are not infected. If you were infected, then it would be more likely that all or a high percentage of the people on your contact list would get spammed…although I suppose it is possible that an infection could be "sneaky" by only spamming some.
Again, if you want to check for infections, then get an anti-virus program, install it, and run a scan.