Sounds like your E-mail account has been compromised, or you picked up a virus.
Immediately have your computer checked for a ‘bug’ or ‘bugs.’ If you have the proper programs, do the scans yourself, if not you need to take your computer to some one who can.
Once it is clean of pests, install a firewall and an anti-virus program if you do not have one yet.
I strongly recommend a program for malware and adware also.
Microsoft Security Essentials is a free download from Microsoft.
http://www.microsoft.com/en-GB/security_essentials/default.aspx
You can run any realtime anti-spyware program with an antivirus program and it will not conflict. Malwarebytes' Anti-Malware works well with antivirus programs, provided that you get the free version, which doesn't have real-time protection. There's a chance of bad interactions with antivirus programs if MBAM's real-time protection is turned on. Install the free version, then update it and run scans occasionally.
http://www.malwarebytes.org/products/malwarebytes_free
Would also recommend that you use a safer browser like Mozilla Firefox.
http://www.mozilla-europe.org/en/
Always keep your Windows, web browser and Java software up to date - frequent patches are released to plug security holes.
After you finish this, then go in and change your password, using a good strong one.
Also, check your account information and make sure no information was changed, if it was change it back immediately.
Then, you will have to inform your contacts that it was not you sending that mail, but they need to check their computers in case they were also infected.
Hope This Helps!
Regards,
Tamim