The worst performing stocks so far this year

Despite the instability in the stock market at the start of 2022, the Dow Jones Industrial Average has shown its resilience, dropping only about 2% for the year.

In comparison to the Nasdaq Composite and the S&P 500, which have both dropped by 8% and 4% to begin the year, the Dow appears to be as steady as ever. Despite outperforming its rivals thus far this year, three of the Dow's components have dropped more than 10% in January 2022.

Even for mega-cap companies, the stock market may be brutal. However, if an investor's risk appetite permits, such stocks can provide long-term stability to their portfolios. As a result, it's critical to keep a watch on such stocks, especially while they're falling.

The S&P 500 is down about 9% year to date, but the worst performers in the major benchmark of US equities performance are falling far worse. The S&P 500's most battered names share a few characteristics, ranging from small, obscure index members to the world's best-known and largest stocks.

For starters, they're all in bear market territory, with prices down at least 27% year to date. Some of these equities are experiencing the ramifications of being among the year's biggest winners. Many stocks that soared in 2021 as pandemic or COVID-19 recovery trades have lost a lot of their value this year.

Worst performers in January 2022

PayPal: (PYPL, $105.20) was the S&P 500's worst performer through February 17, losing more than 44%. Earnings that fell short of Wall Street's expectations hurt, but the company's lack of user growth was far more harmful. Worst of all, PayPal's sales and profit projections were lowered. When high-priced growth stocks fail to meet previous and future expectations, they have no chance in this market. The selling pressure was exacerbated by a succession of analyst devaluations and price target reductions. "It will likely take several quarters of better results to restore investor confidence," says Argus Research analyst Stephen Biggar. He recently cut his profit forecast and price goal for 2022 but kept his Buy rating on the stock.

Meta: Shares of Facebook parent company Meta (FB, $207.71) plunged more than 38% year-to-date through Feb. 17 following a poor fourth-quarter report. Changes to Apple's (AAPL) iOS privacy restrictions impacted Facebook's major advertising business. TikTok and other rivals are luring users away from Meta. To complicate things the company issued a bleak forecast. It's also pouring billions of dollars into the metaverse, a project that may take years to complete and isn't guaranteed to succeed. The market value of Facebook has plunged by $356 billion by 2022, causing havoc on the market-cap-weighted S&P 500.

Netflix: (NFLX, $368.07) Netflix's Q4 earnings report acted as a catalyst for the stock's dramatic drop in January. While the company's Q4 revenues of $7.71 billion were in line with analyst expectations, and GAAP EPS of $1.33 topped predictions by $0.50, subscriber additions of 8.3 million in the fourth quarter fell short of the company's guidance of 8.5 million. The most concerning component, though, was the subscriber addition projection for Q1 2022. Typically, Q1 is a good quarter in terms of customer additions, and investors expected subscriber growth to revert to normal in FY2022, after a rather weak FY2021.

Moderna: (MRNA, $146.36) was one of the best-performing companies in the S&P 500 in 2021, rising 140%.  Investors are weighing the company's fate on the opposite side of the pandemic, with shares down more than 40% year to date. In late January, UBS Global Research initiated coverage of MRNA at Neutral (the equivalent of Hold), highlighting the potential of the company's medications in development.