Have you tried logging into the webmail interface of outlook.com lately.
I've looked at a web search and several people report this problem with
outlook.com and some report it fixed after a web login.  Gmail will do this
at times also where it will require an interactive login prior to automated
ones being set up... to be sure you are legit.

On Mon, Nov 10, 2014 at 1:52 AM, Sam Xie <[email protected]> wrote:

> I'm connecting my outlook and gmail so that I can receive and send mail
> using my "outlook ID" and "gmail interface."
> When I do the POP3 it went fine so now I can view my outlook using gmail.
> However when I do the SMTP step2, it report 535 5.0.0 Authentication
> Failed code(535).
> I'm sure my username and password are correct because I use the same for
> POP3.
> SMTP server: smtp.live.com
> Port: 587
> Secured connection using TLS
> Any ideas?
>
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