hotmail contact list taken over for spamming

This is the second time that something has accessed my  entire contact list on hotmail and sent spam to everyone on the list.

Would anyone know if this could be due to an incorrect setting in Norton 2011? Or could this be directly an issue with an email sent to my hotmail account bypassing the norton antivirus settings. I detected nothing on Norton antivirus scans. I have no other email client installed.

 

I wonder how I can protect against this embarassing situation?

 

Greg